ASBA norms: Sebi says will address pain points, if any

Amid concerns being raised in some quarters on the new ASBA (Applications Supported by Blocked Amounts) system for IPOs, regulator Sebi today said the norms have been put in place after consulting all the stakeholders and the new mechanism appears to be working well.
From January 1, ASBA facility has become mandatory for all categories of investors applying for a public issue for making payment and it allows the bid amount to remain blocked in the applicant's account till allotment of the shares.
Earlier, the bid amount used to get debited from the applicant's bank account, irrespective of the full, part or no allotment of shares applied for by the investor.

While the new system has been hailed as a major investor- friendly move, some market intermediaries have complained of difficulties with the implementation of ASBA including at the end of the banks.
Speaking here at an event organised by industry chamber PHD Chamber on primary market regulations, Sebi's Whole Time Member Prashant Saran said, "We considered those (preparedness-related) issues at the beginning."
Sebi considers the views of all the stakeholders before putting the new regulations, he said, while adding that "if there are pain points, we will address those issues."

The regulator, which anxiously watched the recently launched IPOs, feels the new system is working well.

Speaking at the same event, NSE Chief (Regulations) V R Narasimhan said, "There is inadequacy of training at bank level and some of the banks do not know, how to block the money. We do not know whether small investors are happy with ASBA facility."
BSE's Chief Regulatory Officer Nehal Vora also said that ASBA's bid is still in physical form and there is a need to address the concern.
Several market intermediaries said that problem is that ASBA, a system where money is blocked but stays in an investor's account till allotment is made, is not available with all banks.

The regulator has made ASBA facility mandatory for all categories of investors applying for a public issue with effect from January 1.
In order to enhance the points for submission of applications, Sebi had also allowed Registrar and Share Transfer Agents (RTAs) and Depository Participants (DPs) to accept application forms (both physical as well as online) and make bids on the stock exchange platform.
This will be over and above the stock brokers and banks where such facilities are presently available.
The number of bank branches with ASBA facility has now increased to about 95,500, from 9,800 when this facility was introduced.