Market regulator SEBI on Friday approved the resumption of share buyback through the stock exchange. With this, companies will be able to buy back their shares in the open market from August 1 and a time limit of 66 working days has been fixed for this. With this step of Securities and Exchange Board of India (SEBI), companies will be able to buyback through regular trading system without any special buyback window. This will make the process easier and paperwork will also be less.
The purpose of this decision taken in the board meeting is to improve flexibility and operational efficiency. Additionally, this may make buyback more attractive as a capital allocation tool for listed companies. SEBI had gradually phased out open-market buybacks in 2025. This was due to concerns about unequal treatment of shareholders and tax irregularities, as the system was considered to favor certain investors.
What is buyback?
When a company buys back its own shares from the market, it is called buyback. After this the total number of shares of the company in the market reduces. The company does this when it has excess cash or it feels that its share price is being valued lower than its actual value. Buyback increases investor confidence, improves earnings per share (EPS) and sometimes also supports the share price.
Changes in many other rules also
In the new rules, SEBI relaxed borrowing rules for mutual funds, simplified the process of securities transfer and approved a green-channel system for Alternative Investment Funds (AIFs). The board also approved a new code of conduct for SEBI members and changes to the SEBI (Employee Service) Rules, 2001, to further strengthen rules related to conflict of interest and information sharing.
These changes have been made on the basis of the recommendations of the high-level committee formed to review the governance system of the regulator. In case of mutual funds, SEBI has relaxed the rules for intra-day borrowing. This will provide the schemes the facility to avail intra-day borrowing for redemption payments and other cash management needs.
Mutual funds will get relief
After changes in Mutual Fund Rules, 2026, mutual funds will be allowed to borrow intra-day. This will remove timing mismatches related to pay-in and pay-out settlements, foreign currency related liabilities and mark-to-market payments on derivative positions. SEBI Chairman Tuhin Kant Pandey said the move is aimed at helping fund managers manage daily liquidity mismatches better. It will also be ensured that such loan is repaid before the end of the day.
Securities transfer will be easy
The Board has also approved measures to simplify the process of securities transfer (transmission) after the death of the investor. This will make it easier and faster for the nominee and legal heirs to claim financial assets. The regulator has introduced a new category called ‘Quick Transmission Processing’ (QTP) for low value claims. Under the new framework, QTP facility will be available for claims up to Rs 10,000 for physical securities and Rs 30,000 for demat securities. Apart from this, the limit of transmission has been doubled through easy documentation. Now this limit will be Rs 10 lakh for physical holdings and Rs 30 lakh for demat holdings.
AIF sector will get a boost
The board has approved a new green-channel mechanism named ‘GARUDA’. Its purpose is to speed up the process of launching AIF scheme. Under this framework, eligible AIF schemes will be able to start raising funds within 10 working days of filing the placement memorandum, whereas earlier they had to wait for 30 days. SEBI believes that this will enable capital to be utilized more quickly and efficiently in the AIF industry.
As of March 31, 2026, the number of AIFs registered in the country was 1,849, while the total commitment had reached Rs 15.74 lakh crore. The regulator has also removed the need to file placement memorandum through a merchant banker for schemes and angel funds with only accredited investors. Now such schemes can be launched as soon as the documents are submitted, provided the fund manager gives the necessary undertaking.
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