Mumbai, Jun 19 (PTI) Markets regulator Sebi on Friday approved the reintroduction of share buybacks through stock exchanges, allowing companies to repurchase their own shares in the open market starting August 1, while capping the execution period at 66 working days.

The move by the Securities and Exchange Board of India (Sebi) allows firms to carry out buybacks through regular trading mechanisms without a dedicated buyback window, streamlining the process and reducing procedural requirements.

The decision, taken in the board meeting, aims to improve flexibility and execution efficiency, while potentially enhancing the attractiveness of buybacks as a capital allocation tool for listed companies.

Sebi had phased out open-market buybacks in 2025, citing concerns over uneven treatment of shareholders and tax-related distortions, as the mechanism was seen as favouring select investors.

The reintroduction is expected to revive a capital management route widely used by corporates to return surplus cash to shareholders and support stock prices, particularly in periods of market weakness.

In addition, the board relaxed mutual fund borrowing norms, simplified securities transmission procedures and approved a green-channel mechanism for alternative investment funds (AIFs).

The board also approved a new Code of Conduct for Sebi members and amendments to the Sebi (Employees' Service) Regulations, 2001, to strengthen the framework governing conflict of interest and disclosure requirements.

The changes follow recommendations of a high-level committee constituted to review the regulator's governance framework.

Regarding mutual funds, Sebi eased intra-day borrowing norms for mutual funds by allowing schemes to use intra-day borrowing lines for a wider range of cash management requirements beyond redemption payouts.

The amendment to the Mutual Funds Regulations, 2026, will permit mutual funds to avail of intra-day borrowings to bridge timing mismatches arising from pay-in and payout settlements, foreign exchange obligations and mark-to-market payments on derivative positions, among others.

Sebi Chairman Tuhin Kanta Pandey said the move is aimed at helping fund managers manage daily liquidity mismatches more efficiently while ensuring that such borrowings are repaid by the end of the day.

Besides restoring the buyback route, the board approved measures to simplify the transmission of securities following an investor's death, making it easier and faster for nominees and legal heirs to claim financial assets.

The regulator introduced a new category of Quick Transmission Processing (QTP) for small-value claims and enhanced thresholds for simplified documentation. Under the new framework, QTP will be available for claims of up to Rs 10,000 for physical securities and Rs 30,000 for dematerialised securities.

Further, the threshold for transmission through simplified documentation has been doubled to Rs 10 lakh for physical holdings per listed company and Rs 30 lakh for demat holdings per beneficial owner.

The board also cleared a new green-channel mechanism called GARUDA -- Green-Channel -- AIF Rollout Upon Document Acknowledgement -- to speed up launches of schemes by alternative investment funds.

The framework will allow eligible AIF schemes to begin fundraising within 10 working days of filing their placement memorandums, compared with the current waiting period of 30 days.

Sebi said the move is expected to facilitate faster and more efficient deployment of capital amid rapid growth in the AIF industry.

As of March 31, 2026, the number of registered AIFs stood at 1,849, while cumulative commitments had reached Rs 15.74 lakh crore.

For accredited investor-only schemes and angel funds, the regulator has removed the requirement of filing placement memorandums through merchant bankers. Such schemes will now be allowed to launch immediately upon filing the documents with Sebi, subject to prescribed undertakings by fund managers.

Additionally, the board approved the transfer of the balance amount, administration and management of the capacity building fund for the Social Stock Exchange (SSE) from NABARD to the newly incorporated Social Stock Exchange-Capacity Building Foundation, a Section 8 company.

The fund is currently used for capacity-building initiatives across the social enterprise ecosystem and will now be managed by the newly established foundation.

The regulator also approved an evidence-based review of the SME capital-raising framework as part of a broader exercise to assess the effectiveness of existing market regulations.

The review follows the Union Budget 2025-26 announcement on establishing a mechanism to evaluate the impact of financial sector regulations and improve regulatory responsiveness. An External Experts Advisory Committee had recommended SME capital raising as a key theme for independent review during FY27.

Also, the board approved amendments to the framework governing securitised debt instruments (SDIs) and municipal debt securities.

The decisions are aimed at strengthening market efficiency, improving investor convenience, facilitating capital formation and enhancing regulatory governance across India's securities market ecosystem. PTI MSU SP ANZ TRB TRB