Section 10: Bonus issue by an issuer

10. Bonus issue by an issuer. —(1) Where an issuer whose securities are entered in the central depository system makes a bonus issue, the securities to be issued on the number of securities of that issuer registered in the name of the central depository shall be allotted to the central depository. (2) The central depository shall, upon allotment of securities under sub­section (1), determine the entitlements of the relevant account‑holders, and sub‑account holders to such securities in proportion to the other securities of the same issuer standing in their accounts and sub‑accounts, as of the close of business hours of the central depository on the day before the first day of the period of closure of register of members, debenture‑holders or any other securities of the said issuer and enter the book‑entry securities in the relevant accounts and sub‑accounts in accordance with the determined entitlements: Provided that fractional entitlements to book‑entry securities relating to the bonus securities shall not be credited by the central depository to the relevant accounts and sub‑accounts but the book‑entry securities representing such fractional entitlements shall be consolidated and dealt with in accordance with the regulations.

Effective date: 1997-01-01

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