SEBI Proposes Uniform Timeline for T+2 Trading of Bonus Shares

SEBI has proposed a uniform timeline to ensure timely credit and trading of bonus shares within two days after the record date. This aims to maintain consistency and reduce market volatility. The proposal, open for comments until August 26, mandates issuers to follow a structured procedure for approval and credit of bonus shares.

The Securities and Exchange Board of India (SEBI) on Monday proposed a uniform timeline aimed at ensuring timely credit and trading of bonus shares. This new timeline is set to enable T+2 trading of such shares after the record date, where T stands for the record date.

The current Issue of Capital and Disclosure Requirements (ICDR) rules address overall timelines for the implementation of bonus issues but lack specific guidelines for the credit and trading of bonus shares. This absence has led to non-uniformity in credit and trading timelines for bonus issues, SEBI noted.

To establish uniform timelines, SEBI's proposal mandates issuers to apply for in-principle approval from stock exchanges within five working days of the board meeting that approves the bonus issue. Additionally, the issuer must record the deemed date of allotment as the next working day after the record date (T+1 day). The bonus shares must then be credited and available for trading on the subsequent working day (T+2 day)