Introduction of Unified Payments Interface (UPI) mechanism and Application through Online interface and Streamlining the process of Public issues of securities
Summary
This circular introduces the Unified Payments Interface (UPI) mechanism and online application interfaces for public issues of specific debt securities. It mandates real-time validation of investor details by stock exchanges and depositories to ensure data integrity during the bidding process. The provisions apply to public issues opening on or after January 1, 2021, replacing previous circulars. This section details the electronic block process using UPI mandates, including validation, fund blocking, and status reporting among investors, banks, and exchanges. It outlines post-issue closure procedures where the Registrar reconciles bids, determines allotment basis, and facilitates fund transfers and security credits. Finally, it defines the specific roles and liabilities of the Issuer, Registrar, Stock Exchange, Intermediaries, and Collecting Bank in the public issue process.
Text
After consultation with stakeholders, it has been decided to introduce the following in addition to the already specified modes under the ASBA Circular:
Providing an option to investors to apply in public issues of debt securities through the app / web interface of Stock Exchange(s) with a facility to block funds through Unified Payments Interface (UPI) mechanism for application value upto Rs. 2 Lac;
Permitting the UPI mechanism to block funds for application value upto Rs. 2 Lac submitted through intermediaries (Syndicate members, Registered Stock Brokers, Registrar and Transfer agent and Depository Participants).
Sponsor Bank means a Banker to the Issue registered with SEBI which is appointed by the Issuer to act as a conduit between the Stock Exchanges and NPCI in order to push the mandate collect requests and / or payment instructions of the retail investors into the UPI.
The details of investor viz. PAN, DP ID / Client ID, entered on the Stock Exchange platform at the time of bidding, shall be validated by the Stock Exchange/s with the Depositories on real time basis.
Stock Exchanges and Depositories shall put in place necessary infrastructure for this purpose.
Stock Exchanges shall update demand data on working days on their websites which shall include all the UPI (accepted/pending) and ASBA bids;
The details of commission and processing fees payable to each intermediary and the timelines for payment shall be disclosed in the offer document.
The intermediaries shall provide necessary guidance to their investors in use of UPI while making applications in public issues.
All entities involved in the process shall co-ordinate with one another to ensure completion of listing of securities and commencement of trading by T+6 day.
Stock Exchanges shall formulate and disclose the operational procedure for applying through the app / web based interface developed by them in order to apply in public issue on their websites.
The Merchant Banker shall ensure that the process of applying through the app / web interface developed by the Stock Exchanges as well as the additional payment mechanism through UPI is disclosed in the offer document.
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Source: SecMarx — Introduction of Unified Payments Interface (UPI) mechanism and Application through Online interface and Streamlining the process of Public issues of securities. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.