SEBI Reintroduces Open-Market Buybacks, Cuts AIF Launch Timeline To 10 Days

The Securities and Exchange Board of India (SEBI) on Friday, 19 June, approved a series of regulatory changes aimed at improving market efficiency, speeding up fundraising and making investment processes simpler. Among the key decisions were the reintroduction of open-market share buybacks through stock exchanges, a new fast-track approval route for alternative investment funds (AIFs), and relaxed borrowing norms for mutual funds.

The regulator also approved measures to simplify the transfer of securities after the death of an investor and aligned certain debt market regulations with the Reserve Bank of India’s securitisation framework.

Why Has SEBI Reintroduced Open-Market Buybacks?

SEBI has decided to bring back the open-market buyback route through stock exchanges from 1 August 2026, barely a year after it was phased out. The move follows changes in the taxation framework for buybacks and is expected to give listed companies an additional option to return capital to shareholders.

Under the revised rules, buybacks conducted through stock exchanges must be completed within 66 working days. Companies will also have to utilise at least 40% of the earmarked amount during the first half of the buyback period.

According to SEBI, the route will provide a more equitable opportunity for public shareholders while maintaining uniform tax treatment. The regulator has also brought in safeguards on this front, with promoters now barred from trading in their own company's shares during the buyback window, alongside continued adherence to minimum public shareholding requirements.

Faster Fundraising For AIFs Through GARUDA

The SEBI board also approved GARUDA, short for Green-Channel: AIF Rollout Upon Document Acknowledgement. The mechanism is designed to shorten the launch timeline for AIF schemes.

For schemes aimed at non-accredited investors, the approval timeline has been reduced to 10 working days from the current 30 days. Certain schemes, including those meant exclusively for accredited investors and angel funds, will be allowed to launch immediately after filing the required documents.

The regulator said the change would help deploy capital faster and improve fundraising efficiency.

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What Were The Other Key Decisions?

SEBI also allowed mutual funds to undertake intraday borrowing to bridge settlement-related timing gaps, provided such borrowing is repaid on the same day and is not used for leverage.

In another investor-friendly step, the regulator simplified the transmission process for securities following an investor’s death by removing requirements such as PAN and probate of will in certain cases.

The board further approved changes to boost the securitised debt and municipal bond markets, while also clearing a new code of conduct for SEBI officials and measures to strengthen the social stock exchange ecosystem.

Sources:

Business Standard

The Hindu