No. SEBI/LAD-NRD/GN/2019/33: In exercise of the powers conferred by sub-sections (1) and (2) of section 11 and section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) read with clause (f) of sub-section (2) of section 68 of the Companies Act, 2013, the Securities and Exchange Board of India hereby makes the following regulations to further amend the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018, namely:
1. These regulations may be called the Securities and Exchange Board of India (Buy-Back of Securities) (Second Amendment) Regulations, 2019.
2. These regulations shall come into force on the thirtieth date day from of their publication in the Official Gazette.
3. In the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018,-
I. In regulation 4, –
a) in sub-regulation (i), after the word “company” and before the symbol “:”, the words and symbol “, based on both standalone and consolidated financial statements of the company” shall be inserted;
b) sub-regulation (ii) shall be substituted with the following sub-regulation, namely,-:
“(ii) The ratio of the aggregate of secured and unsecured debts owed by the company to the paid-up capital and free reserves after buy-back shall,-:
a) be less than or equal to 2:1, based on both standalone and consolidated financial statements of the company:
Provided that if a higher ratio of the debt to capital and free reserves for the company has been notified under the Companies Act, 2013, the same shall prevail; or
b) be less than or equal to 2:1, based on both standalone and consolidated financial statements of the company, after excluding financial statements of all subsidiaries that are non-banking financial companies and housing finance companies regulated by Reserve Bank of India or National Housing Bank, as the case may be:
Provided that buy-back of securities shall be permitted only if all such excluded subsidiaries have their ratio of aggregate of secured and unsecured debts to the paid-up capital and free reserves of not more than 56:1 on standalone basis.”
c) in sub-regulation (iv), the proviso shall be replaced substituted with the following proviso, namely,-:
“Provided that the buyback from open market shall be less than fifteen per cent of the paid up capital and free reserves of the company, based on both standalone and consolidated financial statements of the company.”
II. In regulation 5, in sub-regulation (i), in clause (b), in the proviso, after the word “company” and before the symbol “;”, the words and symbol “, based on both standalone and consolidated financial statements of the company” shall be inserted.
