Sebi Speeds Up Bonus Share Trading Process with New Guidelines

The Securities and Exchange Board of India (Sebi) has introduced new guidelines to accelerate the crediting and trading of bonus shares. Starting October 1, 2024, bonus shares can be traded just two days after the record date. This change aims to enhance market efficiency and benefit both issuers and investors.

The Securities and Exchange Board of India (Sebi) announced new guidelines to expedite the process of crediting and trading bonus shares. Starting October 1, 2024, investors will be able to trade bonus shares just two days after the record date.

According to the current ICDR (Issue of Capital and Disclosure Requirements) rules, there are no specific timelines for the crediting of bonus shares and their trading. The newly introduced guidelines aim to boost market efficiency by enabling trading on the second working day after the record date.

Sebi's move will affect all bonus issues announced from October 1, 2024, onward. Companies will now need to apply for in-principle approval from the stock exchange within five working days of the board meeting approving the bonus. The record date, deemed allotment date, and necessary documents must be submitted promptly to facilitate quick credit of shares. Additionally, the temporary ISIN requirement for bonus shares has been eliminated, allowing direct credit into the existing permanent ISIN.

(With inputs from agencies.)