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FAQ's ON EXIT ROUTE SCHEME OF BSE By Niraj Karwa, | ||
What is Exit Route Scheme of BSE? Who is eligible to sell shares in Exit Route? How the orders in physical form are placed in Exit Route? How many shares can I sell in Exit Route? Whether my shares are eligible for delivery through this Scheme? How the settlement of transaction in this scheme takes place? Why should I bear a discount from current market price while selling shares in Exit Route scheme? Can I sell more than 500 shares? What happens if I don't deliver the shares sold ? | ||
Q. A. | What is Exit Route Scheme of BSE? A. The Exit Route Scheme has been devised by BSE and approved by SEBI. This scheme has been implemented to provide an exit to the small investors holding physical shares of the companies where deliveries have to be given compulsorily in demat form only. | |
Q. A. | Who is eligible to sell shares in Exit Route? All small investors holding shares in physical form in respect of companies where deliveries are to be given in demat form are eligible to avail of this scheme. It was observed that small investors having holdings of 100-200 shares worth Rs.10,000-15,000,may not find it economical to open a DP account and undergo the process of getting their physical holdings dematerialised. Therefore, they can sell the shares in physical form through this scheme. | |
Q. A. | How the orders in physical form are placed in Exit Route? On BOLT system the "C" groups window, which is used for trading in odd lot scrips, is used for placing buy and sell orders in exit route scheme. | |
Q. A. | How many shares can I sell in Exit Route? An investor can sell maximum of 500 shares. The BOLT system allows for entry of single order size of 500 shares. However, since the prices in "C" group where delivery could be in physical form are generally lower than when the same scrip is sold in normal segment and delivered in demat form, it would be advisable to the investor to open a demat account instead of selling through this window particularly when his holding is of higher value. | |
Q. A. | Whether my shares are eligible for delivery through this Scheme? Before placing a sell order in Exit Route('C' Group window), please ensure that: | |
Q. A. | How the settlement of transaction in this scheme takes place? Transactions done in the Exit Route Scheme are settled on weekly basis alongwith other C group transactions. | |
Q. A. | If the price of the shares I sold in Exit route goes down…. Should I purchase back and make some trading profit? You cannot square up the transactions done in Exit route scheme as these trades are not netted either against trades in normal groups or against trades in "C" group itself. As such settlement of trades done in Exit Route takes place on trade to trade basis. | |
Q. A. | What happens if shares sold by me are returned back by the Company as bad delivery or under objection? As per SEBI directive, in case of the scrips which have been mandated for demat deliveries, you are allowed to rectify the bad deliveries or give replacement upto 90 days (from the date of SEBI demat mandate) in physical form. Same rule applies on shares sold through Exit Route scheme also. As such if the shares are returned after 90 days from the date of compulsory demat, you need to give demat share eventhough you wished to dispose shares in physical form. Please be sure of your signature etc. while filling up the Transfer Deed. This is the area you need to be extra cautious. | |
Q. A. | Why should I bear a discount from current market price while selling shares in Exit Route scheme? The reasons of a discount in the prices quoted for shares in the Exit Route from the normal market prices of the scrips are: | |
Q. A. | Can I sell more than 500 shares? Yes! But by inputting different orders where each order is for maximum 500 shares. However, again we do not encourage you to sell large holdings through Exit Route Window, as in such cases opening a DP A/c. would be more economical. Investors are advised to work out economics of selling such shares by comparing cost of dematerializing the share etc. and on-going prices of scrips in " C" group i.e exit route window. | |
Q. A. | What happens if I don't deliver the shares sold ? The transaction will be closed out as per the Rules of the Exchange and seller has to incur loss being the difference in sale price and close out price. | |
