SEBI Proposes Scrapping Mandatory Merchant Banker Requirement For Buy-Backs; Seeks Public Comments

The Securities and Exchange Board of India (SEBI) has proposed dispensing with the mandatory requirement of appointing merchant bankers for buy-backs, as part of a wider review and rationalisation of the SEBI (Buy-Back of Securities) Regulations, 2018.

The proposals also include changes relating to shareholder intimation, promoter participation, minimum public shareholding compliance, interval between buy-backs, and open market buy-backs through stock exchanges.

SEBI said it had earlier proposed re-introduction of open market buy-backs through stock exchanges. It added that the Primary Market Advisory Committee (PMAC) had recommended additional measures to strengthen the buy-back framework.

Among the proposals, SEBI suggested mandating companies to electronically inform shareholders as on the date of the public announcement regarding the buy-back offer within one working day of such announcement.

SEBI further proposed that open market buy-backs through stock exchanges should be completed within 66 working days from the date of opening of the offer. The requirement that at least 40% of the buy-back size should be utilised during the first half of the offer period would be retained.

The proposals additionally include dispensing with the requirement of a separate window and display of the company's identity on the electronic screen.

With regard to promoter participation, SEBI proposed freezing, at the ISIN level, shares or other specified securities of the company undertaking the buy-back that are held by promoters and their associates during the buy-back period.

SEBI further proposed inserting an explicit provision in the Buy-Back Regulations to ensure that companies do not announce buy-backs, whether through the open market or tender route, that would result in a breach of minimum public shareholding requirements.

The regulator has also proposed aligning the interval between two buy-back offers under the Buy-Back Regulations with the Companies Act, 2013.

Public comments on the proposals have been invited till May 29, 2026.