Sebi Asks Depositories to Put in Place Operational Framework to Implement Buyback Rules From Aug 1

 Capital markets regulator Sebi on Tuesday directed depositories to put in place an operational framework and necessary system enhancements by August 1 to implement the newly introduced mechanism for freezing promoter holdings at the ISIN level during share buybacks.

In a circular, Sebi asked depositories to issue operational guidelines covering the implementation of the ISIN-level freeze on promoter and promoter group holdings, including the format for listed companies to issue freezing instructions.

The framework will also lay down operational modalities for permitting promoters to tender shares in buybacks conducted through the tender offer route and for allowing the invocation or release of encumbrances created before the commencement of the buyback period.

In such cases, the freeze will continue to apply to the invoked or released shares or other specified securities.

"The depositories shall ensure that the operational framework and the necessary system enhancements are put in place before August 1, 2026," Sebi said.

The circular follows the regulator's notification issued on July 1, 2026, which amended the Sebi (Buy-back of Securities) Regulations, 2018. Under the amended rules, promoter and promoter group holdings, including those of their associates, will remain frozen at the ISIN level from the date the board of directors or shareholders approve the buyback until the offer closes.

The amended regulations provide two exceptions -- promoters can tender shares in buybacks undertaken through the tender offer route, and encumbrances created before the commencement of the buyback period may be invoked, while ensuring that the freeze continues to apply to the invoked or released shares.