Capital markets regulator SEBI on Friday decided to reintroduce open market share buybacks with a faster execution timeline from August 1.
Now the open market share buybacks will be completed within 66 working days from the opening date if at least 40% of funds earmarked have been utilised during the period.
The move is aimed at providing companies with an additional, faster mechanism to repurchase shares from the secondary market. Under the proposed framework, the buyback timeline is capped at a maximum limit of 60 days during which time promoter holdings will be frozen to prevent potential misuse. The regulator also wants companies doing the buyback to notify shareholders electronically within one day of initiating the buyback, SEBI chairman Tuhin Kanta Pandey told reporters here on Friday after a board meeting.
Reintroducing this buyback method would provide companies with an additional mechanism for undertaking buybacks while ensuring equitable opportunity and tax treatment for public shareholders.
The board also approved a wide range of proposals, including relaxation of intraday borrowing norms for mutual funds and simplification of securities transfer procedure following an investor's death along with simpler norms for alternate investment funds.
The board also decided to establish a green-channel mechanism — Garuda— to speed up the launch of AIF schemes. This 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 board also approved measures to revive agricultural commodity derivatives trading.