Sebi Board Revives Open Market Buybacks and Introduces Intraday Borrowing for MFs: 5 Key Decisions Investors Need to Know!
Recent regulatory changes approved by Sebi are poised to enhance the efficiency of capital markets while bolstering investor protection and easing compliance burdens. Among the most impactful decisions is the reintroduction of open market buybacks through stock exchanges, effective August 1, 2026. Companies will now have the flexibility to opt for either the tender offer or open market purchase routes, a notable alteration since prior tax reforms led to the discontinuation of this method. Strict safeguards will accompany this revival, mandating companies to utilize a minimum of 40% of the designated buyback funds within the initial half of the buyback period and ensuring that transactions complete within 66 working days. This is a strategic move to stabilize buyback activities, particularly as promoter participation will be restricted during this timeframe.
Further regulatory updates include amendments to Mutual Fund Regulations that will allow intraday borrowing. This flexibility is critical for asset managers facing short-term liquidity mismatches, enhancing operational efficiency without the risk of leveraging, as any borrowing must be settled by the end of the trading day. The modifications support timely management of foreign exchange settlements and mark-to-market obligations, ultimately aiding mutual funds in navigating market volatility and liquidity challenges effectively.
The initiation of the GARUDA framework marks another significant advancement, streamlining the launch process of Alternative Investment Fund (AIF) schemes. With the option to debut regular AIF schemes within just 10 working days and immediate launches for AI-only schemes and Angel Funds, this initiative is expected to facilitate faster capital deployment and improve the overall business climate for investors. Additionally, the easing of municipal bond regulations aims to strengthen India’s municipal bond market, allowing municipalities to refinance existing debts and incentivizing retail participation through attractive offerings.
Finally, enhancements to the securities transmission process post-death represent a substantial regulatory improvement. The removal of mandatory probate requirements and the acceptance of QR-coded death certificates for verification will significantly simplify and expedite procedures for legal heirs. These streamlined measures are expected to reduce both costs and procedural challenges, aligning with Sebi’s vision of making the capital market ecosystem more inclusive and accessible. Collectively, these developments reflect a proactive approach by the regulator to advance market integrity and operational effectiveness.
Source: The Economic Times
(Expert Note: This report was prepared by the Wealthova team.)