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<p>The Department has noted several significant share buyback announcements in recent
months. These can be undertaken for a variety of reasons such as providing a flexible
tool for returning excess cash to shareholders and offsetting dilution arising from
the issue of new shares such as those issued to employees under employee share ownership
schemes. Buyback activity tends to fluctuate, responding to company-specific and wider
economic conditions such as the interest rate environment.</p><p> </p><p>The Department
commissioned research to further its understanding of longer-term trends in share
buybacks, how and why companies make use of them and whether they are being misused
to hit performance targets and inflate executive pay. The Department is currently
considering this research and will be making an announcement in due course.</p>
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