Market regulator SEBI on Thursday proposed to introduce e-trading in rights issues, a move that will help people with demat accounts to buy and renounce the rights entitlements on electronic platform.
Under the proposed format, “shareholders, who do not want to exercise their Rights Entitlements (RE), can renounce their REs by selling them on the electronic trading platform of stock exchanges”, SEBI said while inviting comments on the proposal from stakeholders.
The trading in REs will close three working days before the closure of the rights issue, the regulator said, adding, it will avoid last minute rush and also ensure that beneficial owner gets sufficient time to submit the entitlement applications to the issuer company.
People can send their comments on the SEBI paper “Proposed Electronic Rights Issue Process and e-trading of Rights Entitlements” by September 25.