A limited company may only purchase its own shares—
by an off-market purchase, authorised in accordance with section 693A or in pursuance of a contract approved in advance in accordance with section 694;
by a market purchase, authorised in accordance with section 701.
A purchase is "off-market" if the shares either—
are purchased otherwise than on a recognised investment exchange, or
are purchased on a recognised investment exchange but are not subject to a marketing arrangement on the exchange.
For this purpose a company's shares are subject to a marketing arrangement on a recognised investment exchange if—
they are listed under Part 6 of the Financial Services and Markets Act 2000 (c. 8), or
the company has been afforded facilities for dealings in the shares to take place on the exchange—
without prior permission for individual transactions from the authority governing that investment exchange, and
without limit as to the time during which those facilities are to be available.
A purchase is a "market purchase" if it is made on a recognised investment exchange and is not an off-market purchase by virtue of subsection (2)(b).
In this section "recognised investment exchange" means a recognised investment exchange (within the meaning of Part 18 of the Financial Services and Markets Act 2000) other than an overseas exchange (within the meaning of that Part).