What is the treatment of bonus shares for MTF-funded holdings?

What is the treatment of bonus shares for MTF-funded holdings? 

  • Bonus shares arising from MTF-funded holdings are credited to the client's Demat account after completion of the corporate action process. Once credited, the bonus shares are automatically pledged in line with the pledge status of the underlying MTF-funded securities and are reflected in the client's portfolio. 

  • The bonus shares remain under pledge for as long as the corresponding MTF position remains open. Upon closure of the MTF position and release of the pledge, the bonus shares become free holdings and are available for normal transactions. 

Note: In the event of a default under the MTF facility, the pledged bonus shares form part of the pledged collateral and may be liquidated in accordance with the applicable SEBI regulations, stock exchange guidelines, and the terms of the MTF agreement. 

Understand MTF Bonus Shares → 
Learn how bonus shares are credited, pledged, and released for MTF-funded holdings. 

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