SEBI board brings back Open-MA
The Securities and Exchange Board of India (Sebi) on Friday approved resumption of open-market buybacks through stock exchanges, alignment of securitized debt instrument norms with the securitization framework of the Reserve Bank of India (RBI), easing of intraday lending rules for mutual funds and faster approvals for alternative investment funds.
The decision by the markets regulator’s board to restart open-market buybacks comes exactly a year after it was phased out. The move follows the revised taxation structure applicable to buybacks. This route will be restarted from August 1, 2026.
The buyback through stock exchanges will have to be completed within 66 working days from opening, with at least 40 per cent of the earmarked funds to be utilized during the first half of the buyback period. Currently, buyback can be done through the tender offer route and the open market route through book-building.
The market regulator has specified certain safeguards, including a cap on promoter shares and compliance with minimum public shareholding requirements. Moreover, the interval between two buybacks has been made in line with the Companies Act, 2013.
In another major reform, SEBI’s board approved amendments to the issue and listing of securitized debt instruments and security receipts (SDI norms), allowing alignment with RBI’s framework on securitization.
SEBI Chairman Tuhin Kanta Pandey said the changes will facilitate RBI-regulated entities to list and grow.
The market regulator also approved exemption of RBI-regulated entities like banks and NBFCs from the mandatory 25 per cent concentration limit while undertaking securitisation, along with additional disclosures. A debtor is the borrower of the original loan or assets – or the entities making payments on the underlying loan.
“Of the outstanding loans of ₹5 trillion, only ₹54,000 crore are listed. Our hope is that what we have done today will lead to more listing and trading of loans,” Sebi whole-time member Amarjeet Singh said.
SEBI’s board approved measures to facilitate continuity of securitization structures in the event of suspension or cancellation of trustee registration. It approved simplification of the framework for transfer of securities to ease claims on securities for the heirs of a deceased investor. These include removing requirements such as PAN and probate of wills in some cases.
On settlement applications by the National Stock Exchange (NSE) on colocation and dark fibre, Pandey said the application has cleared “some levels” such as the High Powered Advisory Committee (HPAC), adding that it is “a matter before it is resolved”.
The regulator is also conducting a study on the impact of the measures introduced on the derivatives market, with a report expected in July. The SEBI chairman also said the regulator is considering measures to remove any hurdles in launching long-term derivatives contracts.
Additionally, a working group of SEBI is deliberating on measures to review the securities lending and borrowing framework (SLB).
Based on the recommendations of the External Expert Advisory Committee, the Board also approved the assessment of the framework for raising capital by small and medium enterprises.
It approved a new code of conduct for SEBI members – the 2026 Code – based on the recommendations of the high-level committee set up to address concerns over conflicts of interest and disclosures by SEBI officials.
The Board has also greenlighted amendments to allow mutual funds (MFs) to undertake intraday borrowing to bridge the gap arising from pay-in and pay-out settlement timings within asset classes, forex settlement and others.
This is in addition to the existing borrowing allowance – up to 20 per cent of a scheme’s net assets – to meet unit-holder payments such as redemptions.
The asset management companies will be responsible for complying with MF regulations for repayment of borrowings by the end of the day and conversion into overnight borrowings. Additionally, intraday borrowing shall not be used as a source of leverage.
The market regulator has also approved a green channel for alternative investment fund (AIF) rollout, called GARUDA (Green-Channel: AIF Rollout Upon Document Acknowledgment), for faster and more efficient deployment of capital by AIFs.
For non-accredited investor schemes, the timeline for launching new schemes by AIFs has been reduced to 10 working days.
Additionally, schemes created only for accredited investors and angel funds have been exempted from filing private placement memorandum through merchant bankers and allowed to be launched immediately upon SEBI registration or filing of PPM.
Among other key changes, SEBI approved relaxations to develop the municipal bond market, including enabling municipalities to raise funds to refinance existing debt of specific projects, allowing two or more municipalities to raise funds through a pooled finance vehicle and relaxation in timelines for post-issue compliance.
To promote municipal (or muni) bonds, the SEBI board allowed issuers to offer incentives such as additional interest or discount on the issue price to certain categories of investors such as senior citizens, retail investors, women and defense personnel.
Other approvals included the transfer of funding, administration and management of the capacity-building fund to a Section 8 company in relation to the Social Stock Exchange.
