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New Clause 228

Company Law Reform Bill [Lords] – in a Public Bill Committee at 1:45 pm on 20th July 2006.

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Treasury shares

‘(1) This section applies where—

(a) a limited company makes a purchase of its own shares in accordance with Chapter (Purchase of own shares),

(b) the purchase is made out of distributable profits, and

(c) the shares are qualifying shares.

(2) For this purpose “qualifying shares” means shares that—

(a) are included in the official list in accordance with the provisions of Part 6 of the Financial Services and Markets Act 2000 (c. 8),

(b) are traded on the market known as the Alternative Investment Market established under the rules of London Stock Exchange plc,

(c) are officially listed in an EEA State, or

(d) are traded on a regulated market.

In paragraph (a) “the official list” has the meaning given in section 103(1) of the Financial Services and Markets Act 2000 (c.8).

(3) Where this section applies the company may—

(a) hold the shares (or any of them), or

(b) deal with any of them, at any time, in accordance with section (Treasury shares: disposal) or (Treasury shares: cancellation).

(4) Where shares are held by the company, the company must be entered in its register of members as the member holding the shares.

(5) In the Companies Acts references to a company holding shares as treasury shares are to the company holding shares that—

(a) were (or are treated as having been) purchased by it in circumstances in which this section applies, and

(b) have been held by the company continuously since they were so purchased (or treated as purchased).’.—[Margaret Hodge.]

Brought up, and added to the Bill.