SEBI Circular on Processing of ASBA applications in Public Issue  of  Equity  Shares and Convertibles – 30th May, 2022

SEBI, vide its Circular dated 30^th December, 2009 has prescribed the facility of Application Supported by Blocked Amount (ASBA) in Public Issues for all categories of investors except Qualified Institutional Buyers (QIBs). Further, SEBI, vide its Circular dated 6^th April, 2010  has extended the facility of ASBA to QIBs in public issues opening on or after 1^st May, 2010.

SEBI, further through Circular dated 1^st November, 2018, introduced  the  use  of Unified  Payment  Interface  (UPI) as  an  additional payment mechanism  with  ASBA  for  Retail  Individual  Investors  and  the  same was mandated w.e.f 1^st July, 2019 vide circular    dated 28^th June, 2019  for  applications  by Retail Individual Investors (RIIs) submitted through Intermediaries..

The Circular further said that, after reviewing the processing of ASBA applications in the Public Issues by market intermediaries and SCSBs and in order to further  streamline the bidding process, a  need  has  been  felt  to implement the ASBA process in line with the aforementioned circulars.

Further Circular said that, the ASBA  applications  in  Public  Issues  shall  be  processed  only  after  the application  monies  are  blocked  in  the  investor’s  bank  accounts.  Accordingly, all intermediaries / market infrastructure institutions are advised to ensure that appropriate systemic and procedural arrangements are made within three months from the date of issuance of this circular.

Further it is to be noted that, Stock Exchanges shall accept the ASBA applications  in  their electronic book building platform only with a mandatory confirmation on the application monies blocked.

Further, all stakeholders  involved  in  the  process  are  advised  to  take  necessary  steps to  ensure  compliance  with  this  circular.  Merchant Bankers shall coordinate with all stakeholders in this regard.

This circular shall be applicable for all categories of investors viz. Retail, QIB, NII and other reserved categories and  also  for  all  modes  through  which the applications are processed.

This circular shall be applicable for public issues opening on or after 1^st September, 2022

Link to the Circular:

https://www.sebi.gov.in/legal/circulars/may-2022/processing-of-asba-applications-in-public-issue-of-equity-shares-and-convertibles_59338.html