Normal-Course Issuer Bid - NCIB

AAA

DEFINITION of 'Normal-Course Issuer Bid - NCIB'

A Canadian term for a company repurchasing its own stock from the public in order to cancel it. In a normal-course issuer bid (NCIB), a company is allowed to repurchase between 5 and 10% of its shares depending on how the transaction is conducted. The issuer repurchases the shares gradually over a period of time, such as one year. This repurchasing strategy allows the company to buy only when its stock is favorably priced.

INVESTOPEDIA EXPLAINS 'Normal-Course Issuer Bid - NCIB'

Companies must file a Notice of Intention to Make a NCIB with the stock exchanges they are listed on and receive approval from the exchange before proceeding with the repurchase. There are limits on the number of shares the company can repurchase in a single day.

In another type of issuer bid, a company will repurchase a set number of shares from all of its shareholders at a predetermined date and price. An issuer bid where a company repurchases all of its shares in this manner is a going private transaction.

RELATED TERMS
  1. Float

    Money in the banking system that is briefly counted twice due ...
  2. Authorized Stock

    The maximum number of shares that a corporation is legally permitted ...
  3. Outstanding Shares

    A company's stock currently held by all its shareholders, including ...
  4. Anti-Dilution Provision

    A provision in an option or a convertible security. It protects ...
  5. Market Capitalization

    The total dollar market value of all of a company's outstanding ...
  6. Dilution

    A reduction in the ownership percentage of a share of stock caused ...
RELATED FAQS
  1. What happens when a company buys back its shares?

    When a company performs a share buyback, there are a few things that the company can do with the securities they buy back. ... Read Full Answer >>
Related Articles
  1. Markets

    6 Bad Stock Buyback Scenarios

    Buying back shares can be a sensible way for companies to use extra cash. But in many cases, it's just a ploy to boost earnings.
  2. Investing Basics

    Why Do Companies Care About Their Stock Prices?

    Read on to learn more about the nature of stocks and the true meaning of ownership.
  3. Investing Basics

    Digging Into Book Value

    This calculation will serve up your portion of the shareholder pie.
  4. Investing

    A Breakdown Of Stock Buybacks

    Find out what these company programs achieve and what it means for stockholders.
  5. Markets

    How Buybacks Warp The Price-To-Book Ratio

    Relying on price-to-book can get ugly if a company has repurchased stock. Learn why.
  6. Markets

    Cash: Can A Company Have Too Much?

    Cash is something companies love to have. But if they are not using it there could be problems.
  7. Economics

    An Introduction to Government Loans

    Government loans further policymakers' efforts to create positive social outcomes by offering timely access to capital for qualified candidates.
  8. Markets

    Capital Markets

    Capital Markets are financial markets where organizations that need money for productive long-term purposes.
  9. Bonds & Fixed Income

    Spotting A Market Bottom

    Recognizing a market bottom can lead to huge opportunities for an investor. We go over how you can spot the bottom so that you can reap the rewards.
  10. Economics

    Introduction To Asian Financial Markets

    We look at the history of Asia's financial development and how investors can get involved in these growing markets.

You May Also Like

Hot Definitions
  1. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  2. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  3. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  4. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  5. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  6. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
Trading Center