Mon Sep 16 15:56:02 UTC 2024: ## SEBI Speeds Up Bonus Share Trading: New Rules Shorten Process to Two Working Days

The Securities and Exchange Board of India (SEBI) announced new rules on Monday that will significantly shorten the time it takes for bonus shares to be traded. Effective October 1, the entire process will be completed within two working days.

Previously, the time frame for bonus shares to become tradable was longer. Under the new regulations, companies must apply for in-principle approval from stock exchanges within five working days of their board meeting approving the bonus issue. After the record date is set, companies are required to submit the necessary documents to depositories by the next working day (T+1) so bonus shares can be credited to investors’ accounts. Finally, the allotted bonus shares will become available for trading on the next working day after allotment (T+2).

This streamlined process is intended to enhance the efficiency of the market and benefit both companies and investors. A bonus issue, where companies distribute free shares to existing shareholders as an alternative to dividend payments, will now see its benefits realized much faster.

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