SEBI’s guidelines soon on share buyback

Kolkata, March 26 (IANS) Capital market regulator SEBI Tuesday said it will “very soon” formulate a guideline on buyback of equity shares and expressed hope that it will also be able to come out with a new insider trading regulations this year.

“We got the impressions that some companies are trying to use the buyback regulation not to reward the shareholders, but to manipulate the share price. So keeping that in mind, in order to safeguard the interests of the investors, we are now coming out with a new buyback regulation,” Securities and Exchange Board of India (SEBI) chairman U.K. Sinha told reporters here.
“Our discussion paper is already in the public domain for more than six months. We have got comments and we are further going to tighten this mechanism very soon. We will formulate our guideline on buybacks,” Sinha said.
He said there were instances when some companies announced a buyback of shares at a certain price but not even raised 25 percent of what was the intended amount of share they wanted to buy back.
Sinha was talking to the media on the sidelines of an interactive session, organised by the Confederation of Indian Industry (CII).
Stating that insider trading activity was an “offence”, the SEBI chief said the expert group, which had been set up for reviewing insider trading norms, would soon start working.
The market regulator has recently constituted a 14-member panel, headed by N.K. Sodhi, to review and strengthen the existing regulatory framework on insider trading.
“The committee will start working very soon and hopefully during this year we will come out with a new insider trading regulations,” Sinha added.