The Securities and Exchange Board of India has issued a circular to implement a new buyback requirement under which shares or other specified securities held by promoters, promoter groups and their associates must remain frozen at the International Securities Identification Number level from the date the board or shareholders approve a buyback until the offer closes. The freeze applies under Regulation 24(i)(ea) of the SEBI Buy-back of Securities Regulations, 2018, while still allowing promoters to tender securities in a tender offer buyback and permitting invocation of encumbrances created before the buyback period began. To make the rule operational, depositories must establish the framework and system changes needed to apply the freeze and issue the related operational guidelines. That framework must cover the instruction format to be used by listed companies, the mechanics for imposing the ISIN-level freeze, the process for allowing tendering in tender offer buybacks, and the treatment of pre-existing encumbrances, including continuation of the freeze on securities that are invoked or released. Depositories must complete the framework and required system enhancements before August 1, 2026. The circular takes effect immediately, and listed companies, recognised stock exchanges, depositories, merchant bankers, and registrars to an issue and share transfer agents must comply with it and with the depositories' operational framework.

Original source Back to tracker