Sebi directs depositories to freeze promoter holdings during buyback period, new rules explained

Mumbai: The Securities and Exchange Board of India(Sebi) has asked depositories to freeze promoter and promoter group holdings at the security level during the buyback period, while allowing them to participate in tender offers and invoke pre-existing pledges.

Under the new rules, promoter holdings will remain frozen from the date the company's board or shareholders approve a buyback until the offer closes.

The regulator, however, clarified that the restriction will not prevent promoters from tendering their shares in buybacks undertaken through the tender offer route.


It also allowed the invocation of encumbrances that were created before the commencement of the buyback period. Sebi has directed depositories to put in place the operational systems and issue detailed implementation guidelines before August 1.