SEBI reintroduces open-market share buy-back through stock exchanges from 1 August 2026
Listed-company secretarial and compliance teams running open-market buy-backs via stock exchanges from 1 August 2026 must complete within 66 working days, deploy 40% of funds in the first half, and freeze promoter securities at ISIN level
Change
On 19 June 2026, the Securities and Exchange Board of India (SEBI) approved amendments to the SEBI (Buy-back of Securities) Regulations, 2018 reintroducing open market buy-back through stock exchanges with effect from 1 August 2026, with completion within 66 working days, at least 40% of earmarked funds used in the first half, ISIN-level freezing of promoter securities, and discretionary merchant-banker appointment.
Why it matters
The reintroduced stock-exchange route is treated as a normal trading transaction, so the separate trading window and on-screen display of the company as purchaser are dispensed with, while promoter and associate securities are frozen at ISIN level for the buy-back period to prevent dealing. Companies may forgo a merchant banker, in which case the merchant banker's functions pass to the Company, Compliance Officer, Statutory Auditor, Secretarial Auditor and Stock Exchanges. Buy-backs must meet minimum public shareholding requirements, and the interval between two buy-backs is aligned with the Companies Act, 2013.
Implications
- — Listed-company secretarial and compliance teams electing the stock-exchange buy-back route must structure the programme to complete within 66 working days of opening and deploy at least 40% of earmarked funds in the first half — missing either parameter breaches the amended Buy-back Regulations from 1 August 2026.
- — Listed-company compliance officers must freeze promoter and associate holdings at ISIN level for the buy-back period and confirm minimum-public-shareholding compliance — failure to freeze exposes the company to investor-protection enforcement, as promoters cannot participate in the open-market route.
- — Listed companies choosing not to appoint a merchant banker must reassign the merchant banker's buy-back functions to the Compliance Officer, Statutory Auditor, Secretarial Auditor and Stock Exchanges — leaving these functions unassigned leaves the buy-back non-compliant.
Who is affected
- — Secretarial and compliance teams at listed companies undertaking buy-backs
- — Compliance officers, statutory auditors and secretarial auditors absorbing merchant-banker functions
- — Merchant bankers advising on buy-back transactions
What to watch
- — Effective 1 August 2026: open market buy-back through stock exchanges becomes available under the amended parameters.