Are there any regulatory or tax implications of the programme under the Market Abuse Regulation and Safe Harbour Rules that could affect execution costs?

Regulatory and tax impact on execution costs

The buy‑back is run under the EU Market Abuse Regulation (MAR) and the accompanying Safe‑Harbour Rules (Reg. 596/2014 and Delegated Reg. 2016/1052). These frameworks impose strict “inside‑information” and “market‑manipulation” safeguards, meaning that every repurchase must be executed within the pre‑announced time‑ and volume‑bands and reported to the regulator in real time. In practice, the broker‑dealer (Jyske Bank) will have to monitor the order‑book more closely than in a free‑float market, use algorithmic or “dark‑pool” venues that can guarantee anonymity, and may split the total DKK 2.25 bn across multiple trades to stay inside the safe‑harbour windows. All of this adds operational overhead and can widen the bid‑ask spread, especially if the market is thin or volatile, raising the effective execution cost above a standard open‑market trade.

From a tax perspective, share‑repurchase programmes are generally treated as capital‑return transactions rather than dividends, so the cash received by shareholders is subject to the standard withholding‑tax regime on share‑sale proceeds (i.e. the same rates that apply to ordinary disposals). However, because the buy‑back is announced as a single‑purpose programme* and may be executed in a series of block trades, the timing of each receipt can affect the tax‑lot identification (FIFO vs. specific‑identification) and potentially the average cost base for each shareholder. If the repurchase is performed at a premium to the prevailing market price, the premium component can be viewed as a deemed dividend in some jurisdictions, which may trigger an additional dividend‑tax charge. Traders should therefore factor in possible tax‑adjusted net proceeds when modelling the true cost of participation.

Actionable take‑aways

1. Expect a modest execution premium – the need to stay within MAR‑safe‑harbour windows and to use low‑visibility venues will likely increase the spread and may require a small price concession (typically 1–3 bps) versus a regular market trade.
   
2. Monitor volume‑band disclosures – Jyske Bank will publish the daily/weekly volume bands; staying within them can help you avoid “market‑manipulation” penalties and the associated compliance‑costs.
   
3. Plan for tax‑adjusted returns – assess the likely tax treatment of the cash‑return (capital‑gain vs. dividend) in your jurisdiction and incorporate any withholding‑tax or dividend‑tax adjustments into your net‑return calculations before deciding on participation size.
   

Overall, while the programme is fundamentally a support‑level signal for JYSK (reflected in the 70 % bullish sentiment), the regulatory and tax environment will add a small but measurable layer of cost that should be priced into any execution strategy.