Dividend income on loaned securities to go to lenders, SEBI stipulates
07 Oct 2010
The Securities and Exchange Board of India has reviewed lending norms for securities, making the lender eligible to receive the dividend income on securities lent outside.
This has been done to help develop the securities market further, the stock markets regulator said in a circular.
SEBI today announced partial modification to its earlier circular of 31 October 2008, to read, "The dividend amount would be worked out and recovered from the borrower on the book closure / record date and passed on to the lender."
The other provisions, as specified in its previous circular of 20 December 2007, on "short selling and securities lending and borrowing" framework" will continue to be applicable, SEBI said in the circular.
SEBI has advised stock exchanges to make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the directive as also bring the provisions of the circular to the notice of the member brokers/clearing members of the exchange.
Stock exchanges have been asked to disseminate the new regulations on their websites.
Bourses have also been asked to communicate to SEBI, the status of the implementation of the circular in their monthly development reports.
.webp)
