Securities and Exchange Board of India, capital market regulator of India has amended SEBI (Buyback of Securities) Regulations, 1998 (“the Regulations”) vide notification dated February 07, 2012 with an objective of aligning the regulatory provisions with the principle of equitable treatment to all shareholders and enhancing the efficiency in the Buyback process.
The purpose of this circular to provide standard letter of offer for Buy Back of equity in accordance with Chapter III of the SEBI (Buy Back of Securities) Regulations, 1998 (hereinafter referred to as “the Regulations”), to provide the requisite information about the company so as to enable the shareholders to make an informed decision of either remaining the shareholders of the company or to exit from the company.
Care shall be taken by the Merchant Banker to ensure that the Letter of Offer may not be technical in legal or financial jargons and it shall be presented in simple, clear, concise and easily understandable language.
This standard Letter of Offer enumerates the minimum disclosure requirements to be contained in the Letter of Offer for the Buy Back of equity. The Merchant Banker/ the company is free to add any other disclosure(s) which in his / its opinion is material for the shareholders.
The merchant banker shall ensure that the disclosures made in the letter of offer are not presented in an incomplete, inaccurate or misleading manner and are made in accordance with the Regulations.
The standard Letter of Offer prescribes only the nature of the disclosures that should be contained under various heads in the Letter of Offer and is not intended to describe the language to be contained therein.
SEBI circular has extensively elaborate contents of draft of Letter of Offer and other particulars of the same issue.
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