SEBI revives open market buybacks, new rules effective August 1; clears new code of conduct for members

SEBI has revived the open-market share buyback route through stock exchanges, with the new framework coming into effect from August 1. The move will allow listed companies to repurchase shares directly from the market, offering greater flexibility in capital allocation and shareholder returns. The revised rules include safeguards such as a 66-day timeline, promoter shareholding restrictions and public shareholding protection. SEBI has also approved a stricter code of conduct for its members and officials to enhance transparency and governance. Bir Bahadur Singh Sachar – Partner, JSA Advocates & Solicitors says: “Permitting open market buybacks represents a significant benefit for companies, as repurchases are executed at prevailing market prices rather than at a predetermined fixed price. This mechanism can be especially beneficial for companies whose current stock price does not fully reflect the underlying value of their business.” Read more