Earlier, the requirement was four days.
REs are traded on secondary market platform of stock exchanges, with T+2 (trading plus two) rolling settlement, similar to the equity share.
The new framework will be applicable for all rights issues and fast track rights issue with immediate effect, the Securities and Exchange Board of India (Sebi) said.
This comes after Sebi received market representation that in case there are trading holidays between last date of REs trading date and issue closure, provision of minimum gap of four days may not always ensure that there are adequate days for settlement, as minimum two working days are required for settlement of REs traded on last day of REs trading window.
REs traded on exchange platform have T+2 rolling settlement. It was further represented that there should be a minimum gap of three working days considering two days for settlement and one additional day for investors to make application in rights issue