Investors with physical securities can tender shares in buybacks: Sebi

The clarification came after Sebi received representations from investors, expressing concerns that they have not been able to participate in open offers, buybacks

Markets regulator Sebi on Friday clarified that shareholders holding securities in physical form are allowed to tender shares in open offers, buybacks through tender offer route, and exit offers in case of voluntary or compulsory delisting.

Such tendering shall be as per the provisions of respective regulations, the regulator said in a circular issued to give clarification with respect to the applicability of regulation 40 (1) of Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015 to open offers, buybacks and delisting of securities of listed entities.

The clarification came after Securities and Exchange Board of India (Sebi) received representations from investors, expressing concerns that they have not been able to participate in open offers, buybacks and delisting of securities of listed entities since the securities held by them were not in dematerialised form.

As per regulation 40 (1) of LODR norms, "...except in case of transmission or transposition of securities, requests for effecting transfer of securities shall not be processed unless the securities are held in the dematerialised form with a depository," Sebi noted.

The regulator said the circular will come into force with immediate effect.