SEBI Mandates ISIN-Level Freeze on Promoter Holdings Under Buy-Back Regulations: Full Circular Breakdown
Overview
The Securities and Exchange Board of India has issued Circular No. HO/49/14/13(11)2026-CFD-POD1/I/16864/2026 dated 21 July 2026, setting out the operational mechanism for freezing promoter and promoter group holdings — including those of their associates — at the ISIN level during a buy-back period. This circular gives effect to the newly inserted Regulation 24(i)(ea) of the SEBI (Buy-back of Securities) Regulations, 2018, which was introduced through an amendment notification dated 1 July 2026.
Background: The Regulatory Amendment
Through its notification of 1 July 2026, SEBI amended the SEBI (Buy-back of Securities) Regulations, 2018 by inserting Regulation 24(i)(ea). This provision mandates that shares and other specified securities held by the promoter and promoter group, including their associates (collectively referred to hereafter as "promoter holdings"), shall be subject to a freeze at the ISIN level.
The freeze on promoter holdings takes effect from the date of passing of the board of directors' resolution or the special resolution, as the case may be, and continues until the closing of the buy-back offer.
While the freeze is broad in its application, the regulation carves out two specific exceptions under which activity on frozen securities is still permitted:
- Tendering of shares or other specified securities in a buy-back undertaken through the tender offer route
- Invocation of encumbrances created prior to the commencement of the buy-back period on such shares or other specified securities