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- Sebi Speeds Up Bonus issue Process, Shares To Be Made Available For Trading On T+2 From October 1
Mumbai10 minutes ago
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All bonus issues i.e. shares announced on or after 1st October will now be made available for trading two days after the record date. Till now, shares of such issues are available only after about two weeks from the record date.
The record date is the cutoff date on which the issuer company considers to decide which shareholders are eligible for the bonus issue. The Securities Exchange Board of India (SEBI) in a circular issued on September 16 said that T+2 trading of bonus shares has been enabled, where T stands for record date.
The circular details the procedure for this and says that any delay in compliance with the timelines mentioned in the process will attract penalty under point 4.1 of SEBI circular SEBI/HO/CFD/DIL2/CIR/P/2019/94 dated August 19, 2019 on ‘Non-compliance with certain provisions of SEBI ICDR Regulations’.
The procedure is as follows –
- The issuer company proposing a bonus issue is required to apply to the stock exchange for in-principal approval under Regulation 28(1) of SEBI (LODR) Regulations, 2015 within five working days from the date of the board meeting approving the bonus issue.
- While fixing the expected record date (T-day) for the proposed bonus issue and notifying the same to the stock exchange under Regulation 42(1) of the SEBI (LODR) Regulations, 2015, the issuer company shall also record on record the deemed date of allotment as the next working day after the record date (T+1 day).
- On receipt of the notice of record date (T Day) and the requisite documents from the issuer company, the stock exchange will issue a notification acknowledging the record date and notifying the number of shares considered in the bonus issue. The notification will include the expected date of allotment (T+1 day).
- After the notification is issued by the stock exchange for approval of the record date, the issuing company shall submit the necessary documents to the depository for depositing the bonus shares in the depository system by 12 noon on the next working day (i.e. T+1 day) of the record date.
- The issuing company shall ensure to upload the Distinctive Number (DN) range in the DN database of the depository and the stock exchange shall ensure to update the relevant dates before credit of bonus shares.
- Shares allotted under the bonus issue will be made available for trading on the next working date of allotment (T+2 day).