Circular No. SMD/Policy/Cir-08/2002 dated 16/04/2019 - SEBI - SMD/Policy/Cir-08/2002

Circulars Deputy General Manager Secondary Market Department SMD/Policy/Cir-08/2002 April 16, 2002 The President/Executive Director/Managing Director of all the Stock Exchanges Dear Sir/Madam, This is in continuation of our circular no. SMD/Policy/Cir-03/2002 dated January 30, 2002 wherein we have issued instructions to the stock exchanges that no delivery period on account of book of book-closure/record date for corporate action such as issue of dividend and bonus share in respect of the scrips which are traded in the compulsory dematerialised mode shall be abolished. The stock exchanges have represented that they would be in position to implement this decision by May 1, 2002 since at present they are engaged with smooth transition to rolling settlement on T+3 basis which began on April 01, 2002. Considering the importance of the smooth transition to the rolling settlement on T+3 basis, it has been decided that stock exchanges would have to implement the decision to abolish the no delivery period by May 01, 2002 and no further extension would be granted in this regard. It was also advised vide our circular dated January 30, 2002 that for implementation of the decision to abolish no delivery period any short delivery by any member in the previous settlement where delivery was to be on cum basis can be closed out to the extent of the short delivery if the shares cannot be acquired in auction on cum basis. As per the existing close-out procedure, the mark-up price for such a close-out is 20%. Stock Exchanges represented that since it is a direct close-out, the mark-up price could be reduced to 10%. In view of the above, it has been decided in case of such direct close-out, the mark-up price would be 10%. In the circular dated January 30, 2002 we had also advised about the reference price for close out. We have received representations from exchanges that they are conducting the close out at the end of the normal trading and that they should be allowed to use the closing price of that day s trading as a reference price for the close out. It has been decided that the reference price for the close out shall be the latest available closing price at the exchange. You are advised to implement the above decisions. Yours faithfully, S.V.MURALIDHAR RAO