Cash Corporate Benefit - Dividend. Non Cash Corporate Benefit - Merger/Demerger, Split, Bonus, Rights etc., . Depository facilitates the execution of corporate actions
In case of cash corporate actions, depository merely provides information to the Issuer about the persons entitled to receive corporate benefits. In case of non-cash corporate actions, NSDL/CDSL facilitates the distribution of non-cash corporate benefits. DPs ensure that the changes in tax status, bank details, change of address etc. in the BO A/c are updated well in advance of the book closure/record date;
All positions in the transit A/c (not applicable in CDSL) e.g., settlement A/c , are cleared and the balances lying therein are transferred to the relevant BO A/c well in advance of the book closure/record date as per the instructions received from A/c holders.
Distribution of Monetary Benefits - 1. R&T agent distributes Dividend to BO list provided by NSDL on the Cut off Date, 2. Companies should use ECS/NEFT/RTGS facility to distribute Dividend. Bank Account details should be printed in Dividend / Interest Warrants. In case of Gov Sec, NSDL / CDSL acts as R&T agent and distribute Dividend also.
Securities balances lying in the A/c of the CM / CC will be eligible to receive corporate benefits. The corporate benefits availed by CM / CC and Intermediaries shall be held in trust on behalf of the BO for onward distribution to BO.
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