Market regulator Sebi on Friday approved a raft of proposals, including the reintroduction of open market share buybacks through stock exchanges, relaxation of intra-day borrowing norms for mutual funds, and a faster fundraising mechanism for alternative investment funds (AIFs), according to a PTI report.
Key Decisions at Sebi Board Meeting
The decisions were taken at the regulator's board meeting, which also cleared measures to simplify securities transmission after an investor's death and revive agricultural commodity derivatives trading.
Return of Open Market Buybacks
A key reform approved by the board is the return of open market buybacks through stock exchanges, a route that had been phased out earlier. According to Sebi, reintroducing the mechanism will provide companies with an additional avenue for buybacks while enabling faster execution. The regulator stated: "Reintroducing this buyback method would provide companies with an additional mechanism for undertaking buybacks while ensuring equitable opportunity and tax treatment for public shareholders."
GARUDA: Green-Channel for AIFs
The regulator also approved the launch of a green-channel mechanism called GARUDA for AIFs. Under the framework, eligible funds will be allowed to start fundraising within 10 working days of filing their placement memorandums, compared with the current 30-day waiting period.
Relaxed Norms for Mutual Funds and Securities Transmission
In addition, the board relaxed intra-day borrowing rules for mutual funds and approved a simplified process for the transfer of securities in the event of an investor's death. These measures aim to enhance operational efficiency and investor convenience.
Revival of Agricultural Commodity Derivatives
Sebi also cleared measures aimed at reviving trading activity in agricultural commodity derivatives, signaling a push to strengthen the commodities market.
