Indian regulator reinstates open market buybacks, tightens rules for officials

MUMBAI, June 20 (Reuters): India's markets regulator on Friday approved the reintroduction of share buybacks via stock exchanges from August 1, capping the duration at 66 working days and allowing trades in the regular market without a dedicated buyback window.
The changes are expected to streamline buybacks by cutting costs and procedural hurdles, enabling faster execution and greater flexibility for companies, potentially boosting their appeal as a capital allocation tool.
The Securities and Exchange Board of India (SEBI) also approved safeguards, including locking in promoter shares during buybacks and barring transactions that would breach the minimum 25 per cent public float requirement.
It retained a rule requiring firms to deploy at least 40 per cent of the buyback amount in the first half of the offer period.
Separately, SEBI Chairman Tuhin Kant Pandey said the regulator will release a fresh study in July on derivatives trading and the impact of regulatory measures.
SEBI approved further measures, including the voluntary adoption of a stricter code of conduct for senior officials at the regulator, requiring them to liquidate or freeze equity holdings and refrain from trading while in office.
The move follows conflict-of-interest allegations by the now-closed Hindenburg Research against former SEBI chief Madhabi Puri Buch over links to the Adani group. Both parties have denied the allegations.
SEBI also approved changes to boost municipal bonds, including allowing refinancing and investor incentives to revive a market used to fund urban projects.
It approved a review of rules that enable small companies to raise capital via equity markets, where they face fewer requirements than larger firms.
SEBI also eased securitisation norms to deepen credit markets and expand funding avenues by making it easier for central bank-regulated entities to sell loan-backed securities.
Securitisation involves pooling illiquid assets and repackaging them ?into tradable, interest-bearing securities, allowing lenders to free up capital to issue more loans while offering investors new income opportunities.