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SEBI Reintroduces Open Market Buybacks: 15% Limit, 66 Working Days from August 1, 2026

Target:UPSC GS-IIIMPSCBankingSSC GATeachingPrelims HighMains MediumStatic GK Link
07 Jul 2026
~2 min
Source: The Hindu
Key Data:15% of paid-up capital and free reserves66 working daysAugust 1, 20264 working days
Bodies:SEBI
Practice MCQs from today's news ▸
What This Article Covers

1.SEBI reintroduces open market share buybacks with new rules effective August 1, 2026, replacing the earlier framework.

2.Buyback limit is less than 15% of paid-up capital and free reserves, and completion must be within 66 working days.

3.Examiner angle: Note the shift from previous 6-month duration to 66 working days, and merchant banker appointment is now discretionary, not mandatory.

The Big Picture
Prelims · HighMains · Medium

SEBI has announced new rules for open market share buybacks effective August 1, 2026, allowing companies to buy back shares through regular trading without a dedicated window. Key changes include a cap of 15% of paid-up capital and free reserves, completion within 66 working days, and discretionary appointment of merchant bankers. This reform aims to improve flexibility, reduce costs, and align with global practices.

Exam Lens

Quick Exam Facts From News

Effective DateAugust 1, 2026
Buyback LimitLess than 15% of paid-up capital and free reserves
Completion Period66 working days
Offer OpeningWithin 4 working days of public announcement
Merchant BankerDiscretionary for company
Regulatory BodySEBI

1-Minute Revision

  • ›Effective Date: August 1, 2026
  • ›Buyback Limit: Less than 15% of paid-up capital and free reserves
  • ›Target this Data: 15% of paid-up capital and free reserves (buyback limit)
  • ›Target this Data: 66 working days (completion period)
  • ›Target this Data: August 1, 2026 (effective date)
  • ›Target this Nodal Body: SEBI (Securities and Exchange Board of India)

Mastered this topic? Test your knowledge with a full MCQ quiz.

Practice exam-style questions, track your score, and strengthen your recall.

Q1Static LinkageEasy

Which regulatory body issued the new rules for open market share buybacks effective August 1, 2026?

Q2Statement-basedHard

Consider the following statements regarding SEBI's new open market buyback rules:

1. The buyback limit is less than 15% of the paid-up capital and free reserves of the company.

2. The buyback offer must close within 66 calendar days from the date of opening.

3. Appointing a merchant banker is now mandatory for all buyback offers.

Which of the statements given above is/are correct?

Q3Data-centricMedium

What is the maximum percentage of paid-up capital and free reserves that a company can use for open market buyback under the new SEBI rules?

Q4Application/ImpactMedium

What is the primary objective of SEBI's new rules for open market share buybacks?

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