SEBI board meeting today: Share buyback norms, MII, other regulations being discussed; press briefing later

The Securities and Exchange Board of India (SEBI) is likely discussing various market regulations, including share buyback norms at its board meeting today – Tuesday, December 20. A press conference will be held after the board meeting at 5 PM. The capital markets regulator had last month sought comments on the consultation paper on the review of regulations on the buyback of securities. A Keki Mistry-headed committee had recommended increasing the size of any buy-backs from 25% to 40% of the paid-up capital and free reserves of the company through a tender offer route. The committee also proposed reducing the cooling-off between buybacks.

The share buybacks through open market transactions may be done in a phased manner, with the option to close down this route from April 2025. The SEBI board may also discuss market infrastructure institutions (MII) norms. Governance norms pertaining to MIIs may be revamped. In a consultation paper, the committee had asked for wider powers for SEBI to levy penalties and take other disciplinary actions such as suspension of directors, members of statutory committees and key managerial personnel associated with MIIs for contravention of regulations.

At least two-thirds of the members of the MII board have to consist of public interest directors (PIDs). A code of conduct for stock exchanges and clearing corporations similar to the existing code of conduct for depositories may be introduced. SEBI may tighten and standardise the regulatory framework for disclosure of material events for companies, which are part of Section 30 of its listing obligations and disclosure requirements.

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Separately, regarding the allocation of new ISINs (International Securities Identification Number) by depositories, SEBI clarified on Tuesday that depositories will not assign new ISIN following a change in the underlying security and the creation of additional security in the case of listed debt securities. Additionally, the new ISIN would not be allocated pursuant to the creation of security in case of unsecured debt securities.