Kolkata: Markets regulator Securities and Exchange Board of India (Sebi) plans to tighten the norms for buy-back of shares following complaints of companies announcing buy-back but not going ahead with it, chairman C.B. Bhave said on Thursday.
“The issue has come to our notice and we are trying to see whether we can tighten our regulations. Our review of what needs to be done is yet to be completed,” Bhave said. Earlier, he inaugurated Sebi’s regional office here. Bhave said it has to be ensured that any share buyback announcement by a company has to be followed by necessary action.
Considering change: Stock markets regulator C.B. Bhave. Harikrishna Katragadda / Mint
The Sebi chief said current norms do not force companies to achieve the buy-back target set by them and hence, there is a need to change the regulations.
“When we tried to enforce it through current regulations, there were some litigations and the orders didn’t go in our favour,” he said.
On the peer review exercise, Bhave said Sebi has received reports on the peer review carried out on companies that figure in National Stock Exchange’s Nifty and Bombay Stock Exchange’s Sensex.
“We plan to undertake peer review of some other companies selected at random at a later stage,” he added.
On the possibility of Sebi allowing currency options, Bhave said the joint committee of Sebi and the Reserve Bank of India is still looking at various issues, including the different kind of currency derivatives that can be allowed.
“It is not even one year since the committee started looking at the issue,” Bhave said, without giving any time frame as to when currency options trade would be allowed.
The same committee is also looking at the introduction of interest rate futures and a report on the same is being finalised. Bhave said the corporate bond market would acquire some depth after money collected under the New Pension Scheme (NPS) starts flowing in.
“The NPS could be helpful (for the bond market) when the money starts flowing in after gathering some momentum,” Bhave said.
Regarding SMEs (exchange for small-and medium-term enterprises), he said Sebi has received some applications.
“We are looking at those applications and we need to do some amount of work before this exchange can start operating.”