SEBI Buy-back of Securities Regulations 2018. Conditions, compliance and filing requirements, tender offer, public announcement, offer procedure etc.
SEBI has notified the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018. These regulations shall come into force on the date of their publication in the Official Gazette.
These regulations shall be applicable to buy-back of shares or other specified securities of a company in accordance with the applicable provisions of the Companies Act.
The major conditions and requirements for buy-back of shares and specified securities (which includes employees’ stock option or other notified securities) provide that the maximum limit of any buy-back shall be twenty-five per cent or less of the aggregate of paid-up capital and free reserves of the company. Also, the ratio of the aggregate of secured and unsecured debts owed by the company after buy-back shall not be more than twice the paid-up capital and free reserves. All shares or other specified securities for buy-back shall be fully paid-up.
The regulation also specifies methods by which a company may buy-back its shares or other specified securities.
It has been provided that the company shall not authorise any buy-back (whether by way of tender offer or from open market or odd lot) unless the buy-back is authorised by the company’s articles and a special resolution has been passed at a general meeting of the company authorising the buy-back.
It has been further provided that the buy-back shall be made only on stock exchanges having nationwide trading terminals.
A company may buy-back its shares or other specified securities through the book-building process also
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