Back-ground: In earlier days, there used to be trading in the renounciation forms in case of all listed Comany issueing fresh shares by way of Right issue. There is absolute need for a platform for such trading to help investors to dispose off their entitlements in a transparent form. There is talk of SBI coming up with right issue with lakhs of shareholders.
Suggestions:With a few simple steps , it possible to start trading of the RIGHT ENTITLEMENT in the stock exchange(s) where its existing securities are listed and being traded.On announcement of a record date/book closure date for any issue, the Company should create an Demat ID in cooperation with depositories (CDSL & NSDL) for the right entitlements and apply for permission for trading such entitlements to the stock exchange(s). On the record date, the Company should allot appropriate quantity of entitlements to the respective beneficiaries. However, for shares held in physical form, an intimation as presently shall be followed.
Trading in the stock exchange(s) should be allowed with effect from the 1st day of acceptance for such entitlements on a trade to trade ,as per the standard terms and usages, basis and should expire 3 days before the closure day and settled as usual.
For applying for shares in acceptance, beneficiary should submit off market instruction in favour of Escrow a/c in cases of entitlements in non-physical form. For applying , the ASBA e-forms may be suitably modified .As this will help in curtailing errors during manual processing and time, the process of the right issue should be smooth as in cases of IPO.
Suggestions:With a few simple steps , it possible to start trading of the RIGHT ENTITLEMENT in the stock exchange(s) where its existing securities are listed and being traded.On announcement of a record date/book closure date for any issue, the Company should create an Demat ID in cooperation with depositories (CDSL & NSDL) for the right entitlements and apply for permission for trading such entitlements to the stock exchange(s). On the record date, the Company should allot appropriate quantity of entitlements to the respective beneficiaries. However, for shares held in physical form, an intimation as presently shall be followed.
Trading in the stock exchange(s) should be allowed with effect from the 1st day of acceptance for such entitlements on a trade to trade ,as per the standard terms and usages, basis and should expire 3 days before the closure day and settled as usual.
For applying for shares in acceptance, beneficiary should submit off market instruction in favour of Escrow a/c in cases of entitlements in non-physical form. For applying , the ASBA e-forms may be suitably modified .As this will help in curtailing errors during manual processing and time, the process of the right issue should be smooth as in cases of IPO.
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