Answer provided by the European Commission in accordance with Article 16b(5) of the ESMA Regulation

Recital 4 of Commission Delegated Regulation (CDR)  2016/1052 clarifies that negotiated transactions that do  not contribute to price formation, can be used for the purpose of a buy-back programme and should benefit from the exemption subject to compliance with the relevant conditions, notably the conditions regarding the purchase price and the permissible daily volume limit. 

However, the CDR 2016/1052 does not provide clarification whether negotiated transactions should be included in the calculation of the average daily volume of the shares on the trading venue indicated in Article 3(3) CDR. Including transactions executed under a pre-trade transparency waiver, such as Large-in-Scale trades might represent a significant proportion of the trading activity and would lead to high average daily volumes. Therefore, their inclusion could dilute the effectiveness of the 25% limit, which could weaken the objective of the provision which is to prevent market abuse. 

Considering the exceptional nature of exemption, the calculation of the average daily volume should be strictly interpreted (i.e. the denominator of the ratio) and include only the volumes which are not executed under a pre-trade transparency waiver. Such approach is also consistent with the spirit of the condition relating to the purchase price, which according to Article 3(2), only takes into account independent trades and purchases and which disregards negotiated transactions. 

In line with the overall MAR objectives “to preserve market integrity” (recital 4 MAR) and therefore to prevent that the price is manipulated through a high volume of buy-back transactions in the order book, it is thus appropriate to exclude in the average daily volume those transactions that are executed under a pre-trade transparency waiver.

_Disclaimer: 

_{The answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.}