Home Acts & Rules SEBI Regulation Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018 Chapters List Chapter II CONDITIONS OF BUY-BACK This
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Regulation 5 - General compliance and filing requirements for buy-back - Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018Extract General compliance and filing requirements for buy-back: 5. (i) The company shall not authorise any buy-back (whether by way of tender offer or from open market 2 [ **** ] unless: a) The buy-back is authorised by the company's articles; b) A special resolution has been passed at a general meeting of the company authorising the buy-back: Provided that nothing contained in this clause shall apply to a case where the buy-back is, ten per cent or less of the total paid-up equity capital and free reserves of the company 1 [ 3 [ ,based on the standalone or consolidated financial statements of the company, whichever sets out a lower amount ]] ; and such buy-back has been authorised by the board of directors by means of a resolution passed at its meeting. 4 [ (c). It has obtained the prior consent of its lenders in case of a breach of any covenant with such lender(s). Explanation : The letter of offer to be prepared by the company in accordance with these regulations shall contain a specific disclosure of the consent obtained by the company from its lender(s). ] (ii) Every buy-back shall be completed within a period of one year from the date of passing of the special resolution at general meeting, or the resolution passed by the board of directors of the company, as the case may be. (iii) The company shall, after expiry of the buy-back period, file with the Registrar of Companies and the Board, a return containing such particulars relating to the buy-back within thirty days of such expiry, in the format as specified in the Companies (Share Capital and Debentures) Rules, 2014. (iv) Where a special resolution is required for authorizing a buy-back, the explanatory statement to be annexed with the notice for the general meeting pursuant to section 102 of the Companies Act shall contain mandatory disclosures mentioned therein and the following disclosures: a) Disclosures under sub-section 3 of section 68 of the Companies Act- i) a full and complete disclosure of all material facts; ii) the necessity for the buy-back; iii) the class of shares or securities intended to be purchased under the buy-back; iv) the amount to be invested under the buy-back; and v) the time-limit for completion of buy-back. b) Additional disclosures under these regulations as provided in Schedule I, c) Provided that where the buy-back is through tender offer from existing securities holders , the explanatory statement shall contain the following additional disclosures: i) the maximum price at which the buy-back of shares or other specified securities shall be made and whether the board of directors of the company is being authorised at the general meeting to determine subsequently the specific price at which the buy-back may be made at the appropriate time; ii) if the promoter intends to offer his shares or other specified securities, the quantum of shares or other specified securities proposed to be tendered and the details of their transactions and their holdings for the last six months prior to the passing of the special resolution for buy-back including information of number of shares or other specified securities acquired, the price and the date of acquisition. (v) A copy of the resolution passed at the general meeting under sub-section (2) of section 68 of the Companies Act shall be filed with the Board and the stock exchanges where the shares or other specified securities of the company are listed, within 5 [ seven working days ] from the date of passing of the resolution. (vi) Where the buy-back is from open market either through the stock exchange or through book building, the resolution of board of directors shall specify the maximum price at which the buy-back shall be made: Provided that where there is a requirement for the Special Resolution as specified in clause (b) of sub-regulation 1 of regulation 5 of these Regulations, the special resolution shall also specify the maximum price at which the buy-back shall be made. 6 [ (via) In case of a buy-back through tender offer, the Board of Directors of the company may, till one working day prior to the record date, increase the maximum buy-back price and decrease the number of securities proposed to be bought back, such that there is no change in the aggregate size of the buy-back. ] (vii) A company, authorized by a resolution passed by the board of directors at its meeting to buy-back its shares or other specified securities under the proviso to clause (b) of sub-section (2) of section 68 of the Companies Act, shall file a copy of the resolution, with the Board and the stock exchanges, where the shares or other specified securities of the company are listed, within two working days of the date of the passing of the resolution. (viii) No insider shall deal in shares or other specified securities of the company on the basis of unpublished price sensitive information relating to buy-back of shares or other specified securities of the company. 7 [ (ix) For the purpose of these regulations, all the filings to the Board shall be made only in electronic mode after being digitally signed by the company secretary or the person authorized by the board of the company. ] ************* NOTES:- 1. Inserted vide NOTIFICATION No. SEBI/LAD-NRD/GN/2019/33 dated 19-09-2019 2. Omitted vide Notification No. SEBI/LAD-NRO/GN/2023/120 dated 07-02-2023 w.e.f. thirtieth day from the date of their publication in the Official Gazette before it was read as, or odd lot) 3. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/120 dated 07-02-2023 w.e.f. thirtieth day from the date of their publication in the Official Gazette before it was read as, , based on both standalone and consolidated financial statements of the company 4. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/120 dated 07-02-2023 w.e.f. thirtieth day from the date of their publication in the Official Gazette. 5. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/120 dated 07-02-2023 w.e.f. thirtieth day from the date of their publication in the Official Gazette before it was read as, seven days 6. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/120 dated 07-02-2023 w.e.f. thirtieth day from the date of their publication in the Official Gazette. 7. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/120 dated 07-02-2023 w.e.f. thirtieth day from the date of their publication in the Official Gazette.
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