SEBI Relaxes Buy back regulations due to COVID-19

Relaxation in Regulation 24(i)(f) of the SEBI (Buy-back of Securities) Regulations, 2018 due to the COVID 19 pandemic

SEB) vide  Circular No. SEBI/HO/CFD/DCR2/CIR/P/2020/69  dated 23^rd April, 2020, Relaxed Regulation 24(i)(f) of the SEBI (Buy-back of Securities) Regulations, 2018 due to the COVID 19 pandemic.

Text of the Circular is as follows:-

Securities and Exchange Board of India

CIRCULAR No. SEBI/HO/CFD/DCR2/CIR/P/2020/69

Dated: April 23, 2020

To
All Listed Entities
All Recognized Stock Exchanges
All Registered Merchant Bankers

Sir / Madam,

Sub: Relaxation in Regulation 24(i)(f) of the SEBI (Buy-back of Securities) Regulations, 2018 due to the COVID 19 pandemic

1. Considering the developments relating to the COVID 19 pandemic, SEBI has received a number of suggestions for relaxation of conditions with respect to raising of funds from the securities market.

2. Currently, regulation 24(i)(f) of SEBI (Buy-back of Securities) Regulations, 2018 (“Buyback Regulations”) provides a restriction that the companies shall not raise further capital for a period of one year from the expiry of buyback period, except in discharge of their subsisting obligations. It has been represented that the said period of one year may be reduced to six months, which would be in line with section 68(8) of the Companies Act, 2013.

3. To enable relatively quicker access to capital, it has been decided to temporarily relax the period of restriction provided in Regulation 24(i)(f) of the Buy-back Regulations. Accordingly the words “one year”shall be read as “six months”in the said regulation.

4. This relaxation will be applicable till December 31, 2020.

5. This circular shall come into force with immediate effect. The stock exchanges are advised to bring the provisions of this circular to the notice of all the stakeholders including the listed entities and also disseminate on their websites.

6. The circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992.

7. The circular is available on SEBI website at www.sebi.gov.in under the category -‘Legal – Circulars’.

Rajesh Gujjar
General Manager
Division of Corporate Restructuring
Corporation Finance Department
Email id: rajeshg@sebi.gov.in
+91-22-2644 9232

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About Author:  CS Lalit Rajput (PARTNER AT Xcede Consultech LLP) and can be reached at consultech@xcede.in / +91 8802581290