SEBI proposes to reduce timelines for share buy backs, open offers

Mumbai, March 26

Securities market regulator SEBI of Friday proposed to reduce the time period taken for share 'buy backs' and 'open offers', on the back of technological advancements made in the tendering and settlement of shares.

"Considering the technological advancements in digital and fintech and changes made in the manner of tendering and settlement of shares, a need was felt to review the overall timelines for procedural activities, including the duration of the tendering period, involved in the open offers and buy-back tender offers...

"... so as to conclude the same in a more efficient and time bound manner and also to synchronise the timelines of similar activities across all the tender offers, 'i.e. Open Offers, Buybacks and Delisting Offers', to the extent possible," it said in a Consultation Paper.

The regulator has proposed changes to various procedural activities involved in the 'buy back' tender offers which would help reduce the overall time required in the 'open offer' process from 43 working days to 36 working days.

Besides, other proposed amendments would help reduce the overall time required in the 'open offer' process from the existing timeline of 62 working days to proposed timeline of 42 working days.

"It is proposed that the 5 working days' period required for publishing of DPS (detailed public statement) from the PA (public announcement) may be reduced to 3 working days and the requirement of DLOF (draft letter of offer) submission to SEBI within 5 working days from the DPS may be changed to 5 working days from the date of PA, i.e. two working days from the date of DPS," the SEBI said in one of its proposals.

"Further, considering the time constraint involved in creation of escrow account, which is required to be done at least two working days prior to the DPS, it is proposed that deposit of money in the escrow account may be linked with filing of the DLOF with the SEBI and may be effected at least two working days prior to the date of the DLOF."