Streamlining public issue of equity shares & convertibles process-Implementation Phase II of UPI with Application Supported by Block Amount
June 28, 2019
Recognized Stock Exchanges
Registered Stock Brokers
Registered Merchant Bankers
Registered Registrars to an Issue and Share Transfer Agents
Registered Depository Participants
Registered Bankers to an Issue
National Payments Corporation of India
Dear Sir / Madam,
Sub: Streamlining the Process of Public Issue of Equity Shares and convertibles-Implementation of Phase II of Unified Payments Interface with Application Supported by Block Amount
1.This refersto SEBI circular No. SEBI/HO/CFD/DIL2/CIR/P/2018/138 dated November 1, 2018,vide which SEBI had introduced the use of Unified Payments Interface (UPI) as a payment mechanism with Application Supported by Block Amount (ASBA) for applications in public issues by retail individual investors through intermediaries (Syndicate members, Registered Stock Brokers, Registrar and Transfer agent and Depository Participants), with effect from January 1, 2019. Implementation of the same was to be carried out in a phased manner to ensure gradual transitionto UPI with ASBA.
2. In order to ensure that the transition to UPI in ASBA is smooth for all the stakeholders, the timeline for implementation of Phase I of the aforesaid Circularwas extended by 3 months i.e. till June 30, 2019 vide Circular No. SEBI/HO/CFD/DIL2/CIR/P/2019/50 dated April 3, 2019.
Implementation of Phase II
3. Accordingly, Phase II of the aforesaid Circular dated November 01, 2018, shall become effective from July 1, 2019. Thereafter, for applications by retail individual investors through intermediaries, the existing process of, investor submitting bid-cum-application form with any intermediary along with bank account details, and movement of such application forms from intermediaries to Self-Certified Syndicate Banks (SCSBs) for blocking of funds, will be discontinued i.e. Channel III at Para 5.1 of Circular dated November 01, 2018 would discontinue. For such applications only the UPI mechanism would be the permissible mode i.e. Channel IV at Para 5.1 of the said Circular.
4. In Phase II, the existing timeline of T+6 days will continue, for a period of 3 months or floating of 5 main board public issues, whichever is later. The implementation of Phase III shall continue unchanged as per the aforesaid Circular from the date of completion of Phase II, as above.
Status of SCSBs on UPI
5. Applications through UPI in IPOs can be made only through the SCSBs/ mobile applications (apps) whose name appears on the SEBI website –www.sebi.gov.inat the following path:
Home » Intermediaries/Market Infrastructure Institutions » Recognised Intermediaries » Self Certified Syndicate Banks eligible as Issuer Banks for UPI A list of SCSBs and mobile application, which, as on the date of this Circular,are live for applying in public issues using UPI mechanism is provided at Annexure ‘A’. The said list shall be updated on SEBI website.
An investor shall ensure that when applying in IPOusing UPI, the name of his Bank appears in the list of SCSBs displayed on the SEBI website which are live on UPI.
Further, he/she shall also ensure that the name of the app and the UPI handle being used for making the application is also appearing in the aforesaid list.
6. An application made using incorrect UPI handle or using a bank account of an SCSBs or bank which is not mentioned in the aforesaid list is liable to be rejected.
7. Investors whose bank is not live on UPI as on the date of this Circular, may use the other alternate channels available to them viz. submission of application form with SCSB or using the facility of linked online trading, demat and bank account (Channel Ior II at Para 5.1 of Circular dated November 01, 2018).
8. Retention of forms by Intermediaries
Intermediaries shall retain physical application forms submitted by retail individual investors with UPI as a payment mechanism, for a period of six months and thereafter forward the same to the issuer/ Registrar to Issue. However, in case of Electronic forms, “printouts” of such applications need not be retained or sent to the issuer. Intermediaries shall, at all times, maintain the electronic records relating to such forms for a minimum period of three years.
9. Frequently asked questions (FAQs) regarding use of UPI with ASBA in public issue processcan be accessed at the following path on the SEBI website –www.sebi.gov.in:
Home » FAQs » FAQs on Primary Market Issuances » Use of Unified Payments Interface (UPI) with ASBA in public issue process
10. All entities involved in the process are advised to take necessary steps to ensure compliance with this circular.
11. The aforesaid Circular dated November 1, 2018, and April 03, 2019 shall stand modified to the extent stated under this Circular.
12.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.
13. This circular is available on SEBI website at www.sebi.gov.inunder the categories “Legal Framework” and “Issues and Listing”.