The Securities and Exchange Board of India (SEBI) has invited comments from the public over a proposal to reduce the time to credit and trade bonus shares, aiming to minimise the risk of market volatility for investors.
At present, bonus share issues are credited and then made available to trade in two to seven business days after the record date (T day). Under the proposed mechanism, bonus shares are available to be traded on T+2 working days. The proposal aims to introduce uniformity, and speed up credit and trading of bonus shares.
The circular also wants all exchanges and depositories to amend their by-laws, rules and regulations. When implemented, failure to comply with the requirements and processes in the proposal will result in penalties being imposed as prescribed under a previous circular issued in August 2019.
Submission of public comments and suggestions close on 26 August 2024 and can be filed online via this link.
