Sebi makes ASBA facility mandatory for all investors

Markets regulator Sebi today said it has made ASBA (Application Supported by Blocked Amount) facility mandatory for all categories of investors applying for a public issue.
ASBA allows the bid amount to remain in the applicants account till the time the shares are finally alloted.
In a notification, Securities and Exchange Board of India (Sebi) said in "public issues, the issuer shall accept bids using only ASBA facility in the manner specified by the Board."
Besides, Sebi said in rights issues, where not more than one payment option is given, the issuer would provide the facility of ASBA.
These norms will be effective from January 1.

In order to enhance the points for submission of applications, Sebi has also allowed Registrar and Share Transfer Agents (RTAs) and Depository Participants (DPs) shall also be allowed 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 increased to 95,500, from 9,800 when this facility was introduced.
Sebi, in June, said presently more than 99.5 per cent applications are received from centres where ASBA facility is available.

"Considering the reach and advantages of ASBA, it shall now be mandatory for all investors to make ASBA applications. Amongst many other significant advantages, ASBA enables investors to give the mandate for payment of application money in the application form itself without suffering loss of interest for the intervening period.
"It also obviates the hassle of refund of money by the issuer as per the difference in application amount and the amount for which shares are finally allotted," Sebi had said.
In public issue, the lead merchant banker would have to submit final post-issue report within seven days of refund of money in case of failure of the issue, as per notification.

In rights issue, the lead merchant banker would submit initial reports within three days of closure of the issue and final post-issue report within 15 days of the date of finalisation of basis of allotment.