Additional mode of payment through Applications Supported by Blocked Amount (ASBA)
Summary
SEBI introduces the Applications Supported by Blocked Amount (ASBA) process as a supplementary mode of payment for public issues. The ASBA facility is restricted to book-built issues and allows resident retail individual investors to block funds in their bank accounts instead of using cheques. Self Certified Syndicate Banks (SCSBs) are authorized to facilitate this process, subject to registration and compliance with specific operational obligations. This section details the step-by-step procedural workflow for the Applications Supported by Blocked Amount (ASBA) process, covering submission, fund blocking, and allotment. It specifies the distinct roles and obligations of Self Certified Syndicate Banks (SCSBs), Stock Exchanges, and Registrars to the Issue at various stages from bidding to T+15. Additionally, it outlines the mandatory contents and declarations required in the ASBA application form. This section outlines the specific operational roles and responsibilities of Stock Exchanges, Self Certified Syndicate Banks (SCSBs), and Registrars to the Issue within the ASBA framework. It mandates technical requirements for electronic bidding systems, data security protocols, and the a
Text
SEBI has decided to introduce a supplementary process of applying in public issues, viz., the “Applications Supported by Blocked Amount (ASBA)” process.
The ASBA process shall be available in all public issues made through the book building route. It shall co-exist with the current process, wherein cheque is used as a mode of payment.
SCSB is a bank which offers the facility of applying through the ASBA process. A bank desirous of offering ASBA facility shall submit a certificate to SEBI as per the format given in Annexure I, for inclusion of its name in SEBI’s list of SCSBs.
It shall then be deemed to have entered into an agreement with the issuer and shall be required to offer the ASBA facility to all its account holders for all issues to which ASBA process is applicable.
A SCSB shall identify its Designated Branches (DBs) at which an ASBA investor shall submit ASBA and shall also identify the Controlling Branch (CB) which shall act as a coordinating branch for the Registrar to the Issue, Stock Exchanges and Merchant Bankers.
The SCSB shall communicate the following details to Stock Exchanges for making it available on their respective websites; these details shall also be made available by the SCSB on its website: (i) Name and address of the SCSB (ii) Addresses of DBs and CB... (iii) Name and contact details of a nodal officer...
An Investor shall be eligible to apply through ASBA process, if he/ she : (i) is a “Resident Retail Individual Investor”; (ii) is bidding at cut-off... (iii) is applying through blocking of funds... (iv) has agreed not to revise his/her bid; (v) is not bidding under any of the reserved categories.
The SCSB shall then block the application money in the bank account specified in the ASBA, on the basis of an authorisation to this effect given by the account holder in the ASBA. The application money shall remain blocked... till finalisation of the basis of allotment... or till withdrawal/ failure of the issue...
The application data shall thereafter be uploaded by the SCSB in the electronic bidding system... Once the basis of allotment is finalized, the Registrar to the Issue shall send an appropriate request to the SCSB for unblocking the relevant bank accounts and for transferring the requisite amount to the issuer’s account.
The issuer shall ensure that adequate arrangements are made by the Registrar to the Issue to obtain information about all ASBAs and to treat these applications similar to non-ASBA applications while finalizing the basis of allotment...
ASBA process shall be applicable to all book-built public issues which provide for not more than one payment option to the retail individual investors.
The details of the role and responsibilities of the Stock Exchanges in the ASBA process are given in Annexure III, for due compliance by the Stock Exchanges.
You have read the preview. Create a free account to read the full document and see every order that applied it.
Free accounts include 10 searches/day with full text access.
Source: SecMarx — Additional mode of payment through Applications Supported by Blocked Amount (ASBA). Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.