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Informist, Tuesday, Jul. 21, 2026

 

--SEBI operationalises freezing of promoter stake for open market buybacks

--SEBI: Circular on promoter stake freeze for buybacks is effective from Tue

 

MUMBAI – The Securities and Exchange Board of India Tuesday announced the operationalisation of the freezing of holdings of promoters, promoter groups, and their associates, for open market buybacks. This follows the SEBI board's recent approval of the proposal to reintroduce the open market buyback option for companies. On Jul. 1, SEBI amended the buyback regulations, under which companies can use the option from Aug. 1.

 

Promoters are not allowed to participate in open market buybacks. SEBI has, therefore, put in place a system to freeze promoters' shareholdings during the open market buyback period.

 

Tuesday's circular operationalises this framework and comes into force with immediate effect. In the circular, SEBI directed the depositories to ensure that the framework and the necessary system enhancements are put in place before Aug. 1.

 

The framework will provide for promoters to tender shares in a buyback undertaken through the tender offer route and for the invocation of encumbrances created before the commencement of the buyback.  End

 

Reported by Rajesh Gajra

Edited by Saji George Titus

 

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