SEBI Amends Buy-Back Regulations To Exclude Material Price Movements

The Securities and Exchange Board of India (SEBI) has amended the SEBI (Buy-Back of Securities) Regulations, 2018, effective May 17, 2024. These changes, under the SEBI (Buy-Back of Securities) (Amendment) Regulations, 2024, focus on excluding the impact of material price movements and confirmed events when calculating the volume-weighted average market price (VWAP) of a company's equity shares. \r

Specifically, Regulation 19 has been modified to allow such exclusions, ensuring that buy-back transactions reflect normal market conditions rather than transient price changes. Additionally, Regulation 22B has been updated to incorporate similar exclusions for determining the lower end of the buy-back price range. \r

These amendments, framed under the SEBI Act, 1992, and the Companies Act, 2013, align with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. By excluding abnormal price effects from VWAP calculations, SEBI aims to enhance the fairness and transparency of buy-back transactions, ensuring they occur at a fair market value.