Capital markets regulator SEBI on Tuesday asked depositories to put in place the operational framework and required system upgrades by August 1 to facilitate the implementation of the newly introduced ISIN-level freeze mechanism for promoter and promoter group holdings during share buybacks.
In a circular, the regulator directed depositories to issue detailed operational guidelines covering the implementation of the ISIN-level freeze, including the format to be used by listed companies while issuing instructions for freezing promoter holdings.
The framework will also specify the operational procedures for allowing promoters to tender shares in buybacks conducted through the tender offer route.
In addition, it will outline the process for the invocation or release of encumbrances created before the commencement of the buyback period.
SEBI clarified that even in cases where such encumbrances are invoked or released, the freeze will continue to apply to the affected shares or other specified securities.
"The depositories shall ensure that the operational framework and the necessary system enhancements are put in place before August 1, 2026," the regulator said in the circular.
The latest directive follows Sebi's notification issued on July 1, 2026, amending the SEBI (Buy-back of Securities) Regulations, 2018.
Under the amended regulations, promoter and promoter group holdings, including those held by their associates, will remain frozen at the ISIN level from the date the board of directors or shareholders approve the buyback proposal until the closure of the buyback offer.
The revised rules provide two exceptions to the freeze. Promoters will be permitted to tender their shares in buybacks carried out through the tender offer route, while encumbrances created before the commencement of the buyback period may be invoked or released, subject to the condition that the freeze continues to remain applicable to the invoked or released shares.
