The bonus shares will be available for T+2 trading from October 1, thereby reducing the time from the record date for crediting and trading.
In a circular issued on Monday, market regulator Securities and Exchange Board of India (SEBI) expedited the process of bonus issue of equity shares under the T+2 settlement system.
Record Date or T Day is the last date on which the company issuing bonus shares decides which shareholders are eligible for the bonus issue.
“As a part of the continuing effort to streamline the process of bonus issue of equity shares, in consultation with market participants, it has been decided to reduce the time required for credit of bonus shares and trading of such shares from the record date of bonus issue under the Sebi (ICDR) Regulations, 2018,” Sebi said in the statement.
Currently, equity shares from bonus issues are available in about two weeks from the record date.
The market regulator said any delay in complying with the timelines mentioned in the circular issued on Monday would attract penalties.
Additionally, SEBI also described the process for T+2 timeline.
3. After receiving the notice of the record date and the required documents from the company, the stock exchange will issue a notification acknowledging the record date. Additionally, it will notify the number of shares to be offered in the bonus issue. The notification will mention the estimated date of allotment.
4. After issuance of notification by the stock exchange, the company should ensure that all required documents for depositing bonus shares in the depository system are submitted to the depository by 12 noon on the next working day after the record date.