SEBI

Review of mechanism of dividend adjustment for stock options-SEBI

Review of mechanism of dividend adjustment for stock options-SEBI

CIRCULAR

CIR/MRD/DoP-1/P/00108/2018

July 5, 2018

All Stock Exchanges

Dear Sir/Madam,

Sub: Review of Adjustment of corporate actions for Stock Options.

1. SEBI, vide Circular No. SMDRP/DC/CIR-8/01 dated June 21, 2001, prescribed a framework for adjustment of corporate actions for stock option contracts. Further, SEBI, vide Circular No. SMDRP/DC/CIR-15/02 dated December 18, 2002 , set out principles for adjustment in derivative contracts at the time of corporate actions.

2. SEBI has been receiving representations from various stakeholders requesting to review the dividend adjustment framework for stock options. The suggestions were examined and placed before the Secondary Market Advisory Committee (SMAC) for deliberations. Based on the recommendations of SMAC, it has been decided to review the mechanism of dividend adjustment for stock options.

3. The adjustment in strike price shall be carried out in the following cases of declaration of dividends:

a. Dividends declared at and above 5% of the market value of the underlying stock ; or

b. All cases of dividends, where the listed entity has sought exemption from the timeline prescribed under the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

4. All other conditions stated in Circular No. SMDRP/DC/CIR-8/01 dated June 21, 2001 and Circular No. SMDRP/DC/CIR-15/02 dated December 18, 2002 shall remain unchanged.

5. Stock Exchanges are advised to:

5.1. take necessary steps and put in place necessary systems for implementation of the above.

5.2. make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision.

5.3. bring the provisions of this circular to the notice of the member brokers of the stock exchange and also to disseminate the same on the website.

6. This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

Yours faithfully,

Amit Tandon

Deputy General Manager

amitt @sebi.gov.in

ITAT allows remuneration paid by wives of CA partners for their services rendered in firm

Remuneration paid by CA firm to wives of CA partners for their services rendered allowed in the absence of any…

6 hours ago

Income Tax

When assessee did not opt yes or no to receive notices by email, such notices were no service

When assessee did not opt yes or no to receive notices by email, such notices amounted to no service In…

8 hours ago

Income Tax

CIT(A) should have considered detailed statement of facts before dismissing appeal

CIT(A) should have considered the details statement of facts filed before him before dismissing the appeal of the assessee observing…

8 hours ago

ICSI

Empanelment of General Observers for ICSI Examinations June 2026. Last date 28.04.2026

Empanelment of General Observers for ICSI Examinations June 2026 ICSI has invited interested members to enroll as General Observers for…

1 day ago

CA CS CMA

Engagement of Young Professionals CA for assistance in ITAT representation

Income Tax Department Pune is engaging Young Professionals CA for assistance in ITAT representation With a view to augment departmental…

2 days ago

Concurrent Audit

IDBI online application for empanelment of Concurrent Auditor. Last date : 27.04.2026

IDBI invites application for empanelment of Chartered Accountant firms as Concurrent Auditor for FY 2026-27 IDBI Bank has invited online…