Processing of ASBA applications in Public Issue of Equity Shares and Convertibles
Summary
This circular mandates that ASBA applications in public issues must be processed only after application monies are blocked in the investor's bank accounts. Stock Exchanges are required to accept ASBA applications on their electronic book building platforms solely with mandatory confirmation of blocked funds. The directive applies to all investor categories and modes, requiring intermediaries to implement necessary systemic arrangements within three months.
Text
SEBI has prescribed the facility of Application Supported by Blocked Amount (ASBA) in Public Issues for all categories of investors except Qualified Institutional Buyers (QIBs)... extended the facility of ASBA to QIBs in public issues opening on or after May 1, 2010.
SEBI introduced the use of Unified Payment Interface (UPI) as an additional payment mechanism with ASBA for Retail Individual Investors... mandated w.e.f July 01, 2019... for applications by Retail Individual Investors (RIIs) submitted through Intermediaries.
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.
Stock Exchanges shall accept the ASBA applications in their electronic book building platform only with a mandatory confirmation on the application monies blocked.
The 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.
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 public issues opening on or after September 01, 2022.
This circular is being issued in exercise of the powers under section 11 read with section 11A of the Securities and Exchange Board of India Act, 1992.
Source: SecMarx — Processing of ASBA applications in Public Issue of Equity Shares and Convertibles. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.