“These amendments aim to streamline the process of buyback, create a level-playing field for investors and promote the ease of doing business,” said Sebi chairperson Madhabi Puri Buch.
New Delhi: In a fresh bid to increase transparency and credibility of the securities markets, the Securities and Exchange Board of India (Sebi) has amended the share buyback norms for listed companies and tightened the disclosure rules. In a release post the board meet on Tuesday (December 20), Sebi confirmed that “buyback through stock exchange route to be phase out in a gradual manner.”
“These amendments aim to streamline the process of buyback, create a level-playing field for investors and promote the ease of doing business,” said Sebi chairperson Madhabi Puri Buch.
Sebi’s New Rules
- Minimum utilization of funds allocated for buybacks through stock exchanges increased from 50 per cent to 75 per cent.
- Requirement of filing draft letter of offer with the regulator to be eliminated – saves time for listed firms.
- Proposals to improve governance and regulations at market infrastructure institutions including stock exchanges, clearing corporations, and depositories.
- The agenda items and minutes of the governing board of the market infrastructure institution pertaining to regulatory, compliance and risk management aspects need to be disclosed on the websites,
- Buybacks to be undertaken through a separate window on stock exchanges till they’re permitted through exchanges.
- Proposal to reduce the maximum time a share buyback process can be open in the market from 90 days to 66 days.
- Upward revision of buy-back price permitted until one working day prior to the record date.
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