The Securities and Exchange Board of India has permitted Stock Exchanges to determine the manner of adjustments in derivative contracts for corporate actions such as dividend and bonus payment.

In a circular addressed to the derivatives cell of Bombay Stock Exchange and National Stock Exchange, Sebi said, ''The basis for any adjustments for corporate action be such that the value of the position of the market participants on cum and ex-date for corporate action continue to remain the same as far as possible.'' The exchanges should take into account the best practices followed internationally, Sebi said.

Stock exchanges should act in consistence with the Sebi circular dated June 21, 2001 on the adjustment for corporate actions and with the decisions of the erstwhile committee on corporate actions.

The capital market regulator also told the SEs that they should ensure that the adjustment methodology for a corporate action is uniform across all SEs.

Meanwhile, Sebi informed the BSE and the NSE that it dissolved the sub-committee of the advisory committee on derivative contracts which was to determine the manner of adjustment in derivative contracts for corporate action.

UNI