Sebi restores open mkt buybacks from August 1

BUYBACKS ARE BACK | Regulator eases norms to speed corporate share repurchase plans

PTI

mumbai

Markets regulator Securities and Exchange Board of India board on Friday decided to reintroduce open market share buybacks through stock exchanges with a faster execution timeline from August 1.  

The Securities and Exchange Board of India (Sebi) said such buybacks will be completed within 66 working days from the opening of buyback with at least 40% of funds earmarked being utilised during the first half of the buyback period. Moreover, it permits companies to execute repurchases directly through the regular trading mechanism without a dedicated buyback window.

Reintroducing this buyback method would provide companies with an additional mechanism for undertaking buybacks while ensuring equitable opportunity and tax treatment for public shareholders. Under the existing regulatory framework, buybacks can be undertaken through the tender offer mechanism and the open market route via book building.

"Considering the revised taxation framework applicable for buybacks, open market buyback through the stock exchange is being reintroduced with effect from August 1, 2026 to provide an additional route for the company to undertake buyback," Sebi Chairman Tuhin Kanta Pandey told reporters after the conclusion of the board meeting.  

Sebi eases intraday borrowing norms for MFs 

Sebi on Friday cleared a proposal allowing mutual funds to use intraday borrowing lines for a wider range of cash management needs, including trade settlements, foreign exchange obligations and derivative margin payments beyond just meeting redemption payouts.  

The move aims to address operational challenges asset management companies (AMCs) face due to timing mismatches between outflows and receivables within a scheme. Currently, intraday borrowing serves as an important cash-flow management tool for mutual fund schemes, helping fund managers efficiently meet payout obligations and settlement requirements.  

Green-channel mechanism to speed up AIF scheme launches cleared 

The Sebi board on Friday approved a new green-channel mechanism, named GARUDA, to speed up the launch of schemes by AIFs. The mechanism allows them to begin fundraising within 10 working days of filing their placement memorandums, compared with the current waiting period of 30 days.  The tool, which stands 

for Green-Channel: AIF Rollout Upon Document Acknowledgement, aims to streamline the processing of placement memorandums filed with the markets regulator and further ease fundraising by alternative investment funds (AIFs). 

This move would further enable faster and efficient deployment of capital by AIFs amid the rapid growth of the AIF industry and the increasing volume of scheme filings.