Introduction

As a part of the continuous effort to further streamlining the public issue fund raising process, SEBI, in consultation with the stake holders has 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 (application amount upto Rs.2,00,000/-) through Intermediaries (Syndicate Members, Registered Stock Brokers, Registrar and Transfer Agent and Depository Participants). The proposed process is being introduced to increase efficiency, eliminate the need for manual intervention at various stages, and reduce the time duration from issue closure to listing by up to 3 working days from current 6 days.

SEBI has introduced an alternate payment mechanism using Unified Payments Interface (“UPI”) and consequent reduction in timelines in a phased manner. From January 1, 2019, the UPI mechanism for Retail Individual Investors applying through Designated Intermediaries will be made effective along with the existing process and existing timeline of T+6 days. The same will continue till Jun 30, 2019 (“UPI Phase I”). Thereafter, for application by Retail Individual Investors through Designated Intermediaries, the existing process of physical movement of forms from Designated Intermediaries to SCSBs for blocking of funds will be discontinued and only the UPI mechanism with existing timeline of T+6 days will continue for a period of three months or launch of five main board public issues, whichever is later (“UPI Phase II”). Subsequently, the final reduced timeline will be made effective using the UPI mechanism for applications by RIIs (“UPI Phase III”), as may be prescribed by SEBI

Please refer SEBI circular no. SEBI/HO/CFD/DIL2/CIR/P/2018/138 dated November 1, 2018 for more details.

FAQs on UPI issued by SEBI:

SEBI FAQ pertaining to use of UPI in ASBA

The same are also available on SEBI website at the following url:

ttps://www.sebi.gov.in/sebiweb/other/OtherAction.do?doFaq=yes

Primary Market Issuances --> FAQs on Primary Market Issuances --> Use of Unified Payments Interface (UPI) with ASBA in public issue process