Sebi likely to ease share buyback norms for NBFC

Mumbai: In the wake of the liquidity crisis hitting the NBFCs and housing finance companies (HFCs), securities market regulator Sebi might ease share buy-back norms for these firms.

The proposal is expected to be presented at the regulator's board meet on Wednesday.

If approved, then the new norms will follow the government's scheme to provide a one-time partial credit guarantee to public sector banks (PSB) for purchase of pooled assets of financially sound NBFCs.

Apart from other things, the scheme envisages that non financial bank companies (NBFC) or HFCs will have the option to buy-back their assets after a specified period of 12 months as a repurchase transaction, on a right of first refusal basis.

Currently, the share buy-back procedure is regulated under the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018.

Under the regulation, the maximum limit of any buy-back has been fixed at 25% or less of the aggregate of paid-up capital and free reserves of the company.

In addition, the Sebi board may bring in more stringent regulations for liquid mutual funds during its upcoming board meeting.

Securities and Exchange Board of India ( SEBI )