Recent Developments for UK PLCs — September 2025

FCA Review Highlights Key Considerations for FTSE 350 Issuers Planning Share Buybacks

On 7 August 2025, the FCA published its review of share buybacks in UK listed equities, which analysed data on share buybacks executed for FTSE 350 issuers, as well as feedback from banks, issuers, investor representatives, and trade associations.

Historically, UK companies have favoured dividends as a method for distributing surplus capital to shareholders. However, in recent years, there has been a notable rise in the volume of share buybacks with companies taking advantage of depressed valuations. According to Bloomberg, 42% of the capital returned to FTSE 350 shareholders from 2022 to 2024 were through share buybacks (up from 20% for the period 2017 to 2019). However, concerns have been raised on the frictional costs involved with buyback executions.

FTSE 350 issuers that consider returning capital to shareholders may find this review helpful if they are contemplating a buyback or specific buyback parameters. In particular, the review highlights certain structuring features and fee arrangements that issuers should interrogate when negotiating with banks on a proposed buyback.

Key points from the review:

• Share buybacks undertaken by FTSE 350 are typically in the form of:
  
  • structured buybacks: a type of non-discretionary share buyback where the outcome is tied to a benchmark, in most cases the shares’ volume-weighted average prices during the buyback’s duration, and the bank receives a variable fee.
  • vanilla buybacks: the bank buys shares on a best-efforts basis and receives a commission-based fee; or

• The review describes the structured buyback products most popular among FTSE 100 issuers (“guaranteed discount and outperformance sharing”) and FTSE 250 issuers (“outperformance sharing with no discount”).

• The FCA did not find material concerns about the outcomes banks delivered when structuring, marketing, and executing share buybacks. On structured buybacks, it did not find unmanaged conflicts in the way the products were executed.

• The review describes the variety of approaches issuers took to appointing a bank to execute their buyback. Issuers typically engage with several banks when considering a structured buyback, often including formal processes to compare banks’ proposals.

• Some banks could improve on the materials they use to educate issuers on the buyback products. Issuers should seek clarity on the following areas if not clearly explained in the banks’ teach-in: (i) all the options available to tailor structured buybacks; (ii) a detailed explanation of how structured buybacks work; and (iii) an explanation of the potential outcomes of structured buybacks.

• The FCA noted feedback that certain disclosure requirements and restrictions under the UK Listing Rules and MAR buyback regime weaken the efficiency of buyback programmes. The FCA stated that it will consider this feedback in any future review of the UK Listing Rules and MAR.