The Securities and Exchange Board of India has ordered depositories to freeze promoter holdings in companies during buyback periods. The measure takes effect from board approval until the offer closes.
SEBI issued the directive to prevent any changes in promoter shareholdings while buybacks are underway. Depositories will enforce the freeze starting from the date of board approval through the close of the offer.
Promoters retain the ability to take part in buybacks using the tender offer route. Any pledges created before the buyback period begins can still be invoked under the new rules.
Depositories have until August 1 to set up the required operational systems. The changes aim to strengthen compliance in the securities market.