Monday, May 2, 2011

SEBI makes ASBA compulsory for non-retail investors

SEBI has made ASBA (Applications Supported by Blocked Amount) facility mandatory for all non-retail investors (HNIs and institutional investors) investing in public and rights issues.

In a circular put out on its Web site on Friday, SEBI said, disclosures shall be made in this regard in the offer document such as in issue procedure section as part of payment instructions.

Under ASBA facility, money would be debited from the bank account only if his/her application is selected for allotment after the basis of allotment is finalised, or the issue is withdrawn/failed.\

The circular also said that syndicate and sub-syndicate members belonging to the cities of Mumbai, Chennai, Kolkata, Delhi, Ahmedabad, Rajkot, Jaipur, Bangalore, Hyderabad, Pune, Baroda and Surat are allowed to obtain and upload ASBA forms.

Direction to banks.

All self-certified syndicate banks that provide ASBA facility have been asked to name at least one branch in these 12 cities where the syndicate and sub-syndicate members can submit the ASBA forms. The list of such branches would be displayed on the SEBI Web site.

SEBI has asked merchant bankers to ensure that appropriate disclosures are made in the offer document in this regard.

All intermediaries have been directed to comply with the instructions in the circular that shall be applicable for offer documents filed with the ROC for public issues and exchanges for rights issues on or after May 2.

SEBI has also put out an indicative timeline for various activities from receipt of completed bid from the investor until commencement of trading with and without ASBA.

Src: moneycontrol

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