13.4. Other Share Buybacks

If an issuer decides to skip the tender offer altogether and simply buy back shares on the open market, it will want to do so in a way that does not open it up to accusations of price manipulation. The SEC offers a safe harbor rule for issuers to follow in this situation. A purchase by an issuer of its own securities within the bounds of this safe harbor rule is sometimes known as a Rule 10b-18 purchase. The following is a reasonable summary of the four main conditions for such purchases to enjoy safe harbor as Rule 10b-18 purchases:

1. One broker-dealer per day. The issuer and its affiliates may not purchase the issuer’s securities using more than one broker-