India markets regulator reinstates open market buybacks, tightens rules for officials
- SEBI also approves safeguards such as requiring promoter shares to be locked in during buybacks
India’s markets regulator on Friday approved the re-introduction of share buybacks through stock exchanges, effective August 1, limiting the duration to 66 working days and allowing trades in the regular market without a dedicated buyback window.
The Securities and Exchange Board of India (SEBI) also approved safeguards such as requiring promoter shares be locked in during buybacks and prohibiting transactions that would breach the minimum 25% public float requirement.
Companies would still be required to deploy at least 40% of the earmarked buyback amount in the first half of the offer period, the regulator added.
SEBI approved additional measures including the voluntary adoption of a stricter code of conduct for senior officials, requiring them to either liquidate or freeze their equity holdings on joining and refrain from trading while in office.
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The move comes after the regulator reviewed its rules following conflict-of-interest allegations by the now-closed Hindenburg Research against former chief Madhabi Puri Buch over links to the Adani group, which was under investigation.
Buch and the Adani group denied the allegations.
SEBI also approved allowing mutual funds to use intraday borrowing, expanding the scope of such facilities and positioning them as a wider cash management tool for fund houses.