Current practice
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The existing rules state that a company must implement the bonus issue within 15 days from board approval or within 2 months if shareholders’ approval is required. However, there are no specific timelines for when these bonus shares should be credited to shareholders’ accounts and when they should be available for trading.
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Presently, as per market practice and exchange processes generally, in case of a bonus issue, existing shares continue to remain available for trading post-record date under existing ISIN, and shares issued via the bonus issue are credited in existing ISIN and the same are made available for trading in 2-7 working days after the record date.
SEBI’s proposal
To have uniformity in timelines for credit and trading of bonus shares and facilitate fast credit and trading of shares allotted under bonus issues, and reduce investors’ risk of market volatility due to any delay in credit of bonus shares, SEBI has proposed to streamline and reduce timelines of bonus issues enabling T+2 trading of shares post record date (T day).
Timeline as per SEBI’s consultation paper:
| Record date | T day |
|---|---|
| Deemed date of allotment | T+1 day |
| Share’s available for trading | T+2 day |
You can read the SEBI’s consultation paper here: