If an authority has already granted permission in advance to buy a certain predetermined amount of shares for “discretionary trading activity over treasury shares” and those shares are the ones that are passed on to employees as part of their remuneration. Under Article 29 of Commission Delegated Regulation 241_2014 is there needed a separate permission to pass on to employees those own shares?

The “discretionary trading activity over treasury shares” is a wide common activity carried out by listed companies to engage purchases and sales of their own shares on entirely discretionary basis (with no commitment from the listed company to carry out purchases or sales and no expectation from the market that such activity will occur at any given price or for a given volume) For “discretionary trading activity over treasury shares” competent authorities may give their permission in accordance with the criteria set out in Article 78 CRR in advance for a certain predetermined amount, subject to Article 29(3) of the RTS on Own Funds. In accordance with Article 28(2) of the RTS and Q&A 1352, the predetermined amount for which the competent authority has given its permission should be deducted from the moment the authorisation is granted, as sufficient certainty about the repurchase is deemed to exist from that moment. If an authority has already granted permission in advance for “discretionary trading activity over treasury shares”, the purchases of own shares made under the authorization must comply with the discretionary trading purpose indicated in the application submitted to the competent authority (i.e. shares shall only be purchased for discretionary trading purposes by a separated area taking decisions under autonomous basis). The positive balances generated by the discretionary trading transactions are actively managed in order not to exceed the pre-authorized limit. These balances could be managed in various ways, including direct sale, distributions to shareholders, redemption by capital decrease, delivery or assignment of shares to comply with previously acquired commitments (e.g. exchangeable securities) or to employees, among others. Confirmation is needed that no additional permission should be required to pass on to employees the shares previously purchased under and with the objective of the pre-authorization granted.

Please note that as part of adjustments to the Single Rulebook Q&A process, agreed by the EBA and the European Commission, it has been decided to reject outstanding questions submitted before 1 January 2020, when the Q&A process was updated as part of the last ESAs Review. In particular, the question that you have submitted has now regrettably been rejected and will not be addressed.

If you believe your question would still benefit from clarification, you are invited to resubmit your question, adapting it to reflect any legislative, regulatory or other relevant developments that may have occurred since the initial date of submission. The EBA will aim to address resubmitted questions as a matter of priority. When considering to resubmit, you are kindly requested to observe the updated admissibility criteria agreed in the context of the adjustment of the Q&A process, available in the Additional background and guidance for asking questions. We hope for your understanding.

For further information please refer to the press release and the updated Q&A page.