Bonus Share issues:There is good news for stock market investors. Regulator Securities and Exchange Board of India (SEBI) on Monday issued new guidelines to speed up the process of bonus shares coming into the account and its trading. Under this, investors can trade in bonus shares within two days after the record date. This rule will come into effect from October 1.

what is the detail

The existing ICDR (Issue of Capital and Disclosure Requirements) regulations prescribe timelines with regard to the implementation of bonus shares. However, there is no specific timeline for crediting bonus shares to the books and trading of such shares from the record date of issue. Currently, trading in existing shares after bonus shares continues under the same ISIN (Indian Securities Identification Number) and new bonus shares are credited to the books and are available for trading within two to seven working days after the record date.

Investors will benefit

Under the guidelines, trading in bonus shares will now be possible within two working days (T+2) after the record date. This will increase market efficiency and reduce delays. This will apply to all bonus shares declared on or after October 1, 2024, the Securities and Exchange Board of India (SEBI) said in a circular. The move will reduce the time gap between bonus share allotment and trading, which is expected to benefit both issuers and investors.