GENERAL MANAGER
Market Intermediaries Regulation & Supervision Department
Division of Policy & Supervision – 2

MIRSD/DPS-2/MB/Cir-02/8859/04
May 07, 2004

To
All Registered Merchant Bankers

Dear Sirs,

Sub: Guidelines in respect of the disclosures to be made in the Letter of offer in respect of buy back of securities in terms of SEBI (Buy Back of Securities) Regulations, 1998 and Format of Standard letter of offer

As you are aware that regulation 8 of the SEBI (Buy Back of Securities) Regulations, 1998 (the Regulations) requires that the company proposing to buy back its securities shall make disclosures in  the letter of offer, as specified in Schedule III thereof.  Schedule III of the Regulations enumerates the disclosures to be made in the letter of offer. As per clause 25 of Schedule III of the Regulations, the Board may specify disclosures other than those enumerated in other clauses of Schedule III.

At present, the merchant bankers appointed by the companies have been preparing the draft letter of offers, as per their professional experience, containing the disclosures as per Schedule III of the Regulations. Taking into consideration the development in the field of buy back activities and continuous development in the market and in order to further strengthen the disclosures as made in the Letter of Offers, it was also felt that in terms of clause 25 of Schedule III of the Regulations, certain additional disclosure requirements may also be specified.

In order to provide the requisite information to the shareholders as per the Regulations it was felt that a standard letter of offer providing for the disclosures as per Schedule III of the Regulations and additional necessary and material disclosures may be specified. Accordingly, a draft of the proposed standard letter of offer was prepared and put up on SEBI website for public comments thereon.

The Board in its meeting held on 16.04.2004 considered the proposed format of the standard letter of offer and the public comments received thereon and in exercise of its powers conferred upon it under clause 25 of Schedule III of the SEBI (Buy Back of Securities) Regulations, 1998 read with section 11 of SEBI Act and section 77A of the Companies Act approved the proposed standard letter of offer and the disclosures specified therein.

Accordingly, a standard format of the letter of offer alongwith the general instructions/guidelines has been prepared and enclosed. The said format is also available on SEBI’s web site at www.sebi.gov.in.

You are advised to follow the said format while preparing the draft letter of offers and to ensure filing the same in terms of regulation 8 (4) of the Regulations.
This circular is being issued in exercise of powers conferred by section 11 (1) of the Securities and Exchange Board of India Act, 1992 read with regulation 8 and Schedule III of the SEBI (Buy Back of Securities) Regulations, 1998.

Yours faithfully,
SURESH B. MENON

Enc: as above

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