In a circular issued on Monday, Sebi has enabled T+2 trading of the bonus issue, meaning that the shares allotted in the bonus issue will now be available for trading on the next business date of allotment.
The record date is the deadline for shareholders to be eligible for a bonus issue.
The circular will apply to all bond issues announced after October 1, 2024.
The measure aims to speed up the process of issuing bonds equity actions, the circular states, adding that any delay in meeting the stipulated deadlines will lead to sanctions.
Sebi has also laid down operational procedures to implement the same. As per the new norms, a company proposing a bonus issue must apply for in-principle approval from the stock exchange within 5 business days from the date of the board meeting approving the bonus issue. The issuer, while fixing and informing the stock exchange of the record date (T-day) will also have to accept the deemed allotment date on the next business day from the record date (T+1 day). On receipt of the notification of the record date (T-day) and necessary documents from the issuer, the stock exchange must issue a notification accepting the record date and notifying the number of shares considered in the bonus issue. The notification must also include the deemed date of allotment.
The issuing company must then ensure that the necessary documents are submitted to the depositaries for the payment of the bonus shares into the depository system no later than 12 noon on the next business day after the registration date.
The issuer shall upload the distinctive number (DN) ranges into the depositary’s DN database and the stock exchange(s) shall ensure that the relevant dates are updated prior to crediting the bonus shares.
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