Sebi proposes to tighten regulations on issuance of bonus shares

The market watchdog noted that the proposed change will help mitigate the mismatch between the listed capital and issued capital of the issuer

The capital market regulator plans to tighten regulations on the issuance of bonus shares, making only the dematerlialised ones eligible. Further, it has also proposed to streamline rules for under-writing of nitial public offerings (IPO) and follow-on public offers (FPO).

The Securities and Exchange Board of India (Sebi), on Wednesday, floated a consultation paper seeking comments on changes in Issue of Capital and Disclosure Requirements Regulations (ICDR).

“A listed issuer shall be eligible to announce its bonus issue only if it has received in-principal approval from the stock exchanges for listing of all the pre-bonus securities issued by the listed