SEBI Proposes Overhaul of Share Buyback Rules

India's market regulator, SEBI, has initiated a public consultation for a revised share buyback framework, aiming to modernize the process. The proposed changes include the reintroduction of open market share buybacks, with a significantly reduced execution timeline of 66 working days, down from the previous six months.

SEBI also seeks to enhance transparency and ease of doing business by mandating electronic intimation of buyback offers to all shareholders within one working day of the public announcement. The regulator is proposing to do away with the separate trading window mechanism, allowing buybacks to occur through the normal trading system.

Further, SEBI plans to freeze promoter shares during buyback periods, except for tendering in tender offers. The proposals also include ensuring buybacks do not breach minimum public shareholding norms and aligning the interval between buybacks with the Companies Act, 2013.

To promote ease of business, SEBI suggests dispensing with the mandatory appointment of merchant bankers for buybacks, reassigning responsibilities to companies and compliance officers. Public comments on these proposals are invited until May 29.