Within the framework of the efforts exerted by the CMA to raise investment awareness of all financial society members, the capital market and traders therein, the CMA has recently introduced a comprehensive manual regarding all aspects related to treasury stocks.

This manual tackles a highly specialized and extra-ordinary issue in the field of corporate finance, and issue with many interpretations and indications which may have direct impact on shareholders of listed companies.

The manual provides a definition of treasury stocks, the means for repurchase by companies of their shares, the reasons for these transactions and the means for handling same. Moreover, due to the various financial effects and treatments of treasury stocks, the manual explained the effects arising out of treasury stock transactions, which include accounting treatment, accounting disclosure, and the elements required to be disclosed upon application of companies' shares repurchase program and relevant tax treatments. The significant accounting errors which may be committed by issuing companies upon undertaking accounting treatments of treasury share transactions were also discussed in the manual, which further tackled the methods for control of trading by companies of their shares and the improper practices made prior to organization of treasury stock transactions, for listed companies to avoid these errors in future.

The CMA confirms that this manual is designed for issuing companies, investors from companies' board members and market dealers, and that this manual may participate in improvement of the quality of their financing and investment decisions.

The manual further allows shares investors to have a clear picture of all scientific, practical, philosophic, technical and professional aspects, to clarify all facts, rights and obligations of treasury stocks.

To access the full text of the manual,. Click Here