The Securities Exchange Board of India (SEBI) on May 08, 2026, issued the Consultation Paper for Public Comments: Review and rationalization of (Buy-Back of Securities) Regulations, 2018.
The following has been stated:
• The proposals follow recommendations of the Primary Market Advisory Committee (PMAC) and aim to improve ease of doing business while strengthening investor protection. SEBI has proposed mandatory electronic intimation of buy-back offers to shareholders within one working day of the public announcement, reintroduction of open market buy-backs through stock exchanges with a maximum completion timeline of 66 working days, and retention of the requirement to utilize at least 40% of the buy-back amount during the first half of the offer period. The paper also proposes the removal of the separate trading window and the display of company identity during buy-back trades, as differential tax treatment no longer exists.
• Further, SEBI has proposed freezing promoter and promoter group holdings at the ISIN level during the buy-back period to prevent dealings in company securities, while allowing participation in tender offers where permitted. We also propose an explicit provision to ensure that no buy-back results in a breach of the Minimum Public Shareholding (MPS) norms. The regulator additionally proposes aligning the minimum gap between two buy-back offers with provisions under the Companies Act, 2013, instead of maintaining a separate SEBI timeline.
• A major ease-of-doing-business proposal is the removal of the mandatory requirement to appoint a Merchant Banker for buy-backs. Several responsibilities currently handled by Merchant Bankers, such as filings, disclosures, escrow oversight, certifications, and extinguishment compliance, are proposed to be shifted to companies, stock exchanges, compliance officers, and secretarial auditors. SEBI believes this would reduce procedural costs and simplify buy-back execution while retaining accountability of company boards and compliance officers.
Public comments on the proposals have been invited till May 29, 2026.
