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Coronavirus impact: SEBI reduces restriction period to raise funds after buyback to 6 months

The SEBI has now revised the period to six months and the relaxation will be applicable up to December 31, 2020

twitter-logoBusinessToday.In | April 23, 2020 | Updated 16:53 IST
Coronavirus impact: SEBI reduces restriction period to raise funds after buyback to 6 months
Securities and Exchange Board of India

The Securities and Exchange Board of India (SEBI) on Thursday temporarily relaxed a restriction which barred companies from raising further capital from the securities market for a period of one year from the buyback period expiry amid coronavirus crisis. The SEBI has now revised the period to six months and the relaxation will be applicable up to December 31, 2020. The decision will come into effect immediately, SEBI also said in the circular released Thursday. "To enable relatively quicker access to capital, it has been decided to temporarily relax the period of restriction provided in Regulation 24(i)(f) of the Buy-back Regulations. Accordingly the words "one year" shall be read as "six months" in the said regulation," SEBI said.

It comes after various industry bodies made representations to the capital markets regulator on the issue, SEBI added. The regulator has also asked all stock exchanges to bring the provisions of the relaxation to the notice of all stakeholders including listed entities.

Meanwhile, SEBI recently said that the regulatory measures introduced last month will continue to be in effect until May 28 amid uncertainty in the stock markets owing to coronavirus. The measures were taken by the SEBI to ensure orderly trading and settlement and effective risk management amid coronavirus crisis. "Keeping in view the objective of ensuring orderly trading and settlement, effective risk management, price discovery and maintenance of market integrity, it has been decided that the measures implemented since March 23, 2020 will

continue to be in force till May 28, 2020," the SEBI had said in a statement released Monday.

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