Starting October 1, bonus shares announced by companies will be available for trading within two days (T+2) of the record date, according to new guidelines issued by the Securities and Exchange Board of India (Sebi). Currently, shareholders must wait approximately two weeks for bonus shares to be tradable.
The record date refers to the cutoff date used by the company to determine which shareholders are eligible for the bonus shares. The circular, issued on September 16, outlines the procedure for T+2 trading and mentions that delays in compliance will attract penalties, as per SEBI’s guidelines.
Here’s the new procedure:
- Companies must apply for in-principle approval within five working days of the board meeting that approved the bonus issue.
- Companies must fix and inform the stock exchange of the record date (T day) and the deemed allotment date (T+1 day).
- Upon receiving these documents, the stock exchange will notify the number of shares issued in the bonus issue.
- By 12 PM on the next working day (T+1 day), companies must ensure the bonus shares are credited to the depository system.
- Issuers must upload the distinctive number (DN) ranges to the depository and stock exchange databases.
- Bonus shares will be available for trading on the next working day (T+2 day).
The new rule is expected to streamline the bonus issue process and provide faster access to bonus shares for trading.
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Source: Moneycontrol
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