INSUBCONTINENT EXCLUSIVE:
Markets regulator Sebi plans to revise the regulations for share buybacks wherein more clarity would be provided on various aspects,
including on the requirement to make public announcements, according to a senior official.
The watchdog has carried out a review of the
current buyback norms in order to simplify the language, remove inconsistencies and update the references to the new Companies Act that came
into force in April 2014.
The official said definition of buyback period and clarity on the requirement to make public announcement for
buyback offer after declaration of postal ballot results would be provided in the amended regulations.
Besides, explanation for 'free
reserves' in line with Companies Act, 2013 would be part of the new framework.
The revised framework for share buybacks is likely to be
discussed during the Sebi's board meeting on June 21, the official said.
According to the official, said 'buyback period' would be defined
as the time between date of authorisation for buyback by a company's board of directors and the date on which the payment is made to
shareholders who have accepted the offer.
Another proposed change is with regard to filing requirements and time for public
announcements.
The official said that a company, that has been authorised to do the buyback of shares, should make a public announcement
within two working days of its declaration.
Two days would be from the "date of declaration of results of the postal ballot for special
resolution/ board of directors", the official added.
A company can undertake buyback of shares out of its free reserves and securities
premium account, among others.
However, buybacks cannot be made out of the proceeds of an earlier issue of the same kind of shares or same
kind of other specified securities.
Free reserves include securities premium account.
