Introduction of UPI mechanism and Application through Online interface and Streamlining the process of Public issues of securities

Last updated: 24 November 2020

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The Securities and Exchange Board of India (SEBI) has introduced a new mechanism for applying to public issues of securities. Investors can now apply through online interfaces provided by stock exchanges or intermediaries, with the option to block funds using the Unified Payments Interface (UPI) for application values up to Rs. 2 Lakh. This aims to streamline the process and offer greater convenience to investors.

Securities and Exchange Broad of India CIRCULAR SEBI/HO/DDHS/CIR/P/2020/233 November 23, 2020 To Recognised Stock Exchanges Registered Depositories National Payments Corporation of India Registered Depository Participants, Stock brokers, Merchant Bankers, Registrars to an Issue and Share Transfer Agents, Bankers to issues, Sponsor Banks Self-Certified Syndicate Banks Issuers who propose to list Debt securities, Non-convertible redeemable preference shares, Securitised Debt

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FAQ :

A new mechanism is being introduced that allows investors to apply for public issues of securities through online interfaces and block funds using the Unified Payments Interface (UPI).

UPI can be used to block funds for application values up to Rs. 2 Lakh.

Investors can apply through the app or web interface of stock exchanges, or via intermediaries like syndicate members, stock brokers, registrars, and depository participants, using their UPI ID.

NPCI, an initiative of the Reserve Bank of India, is the umbrella organisation for retail payments and has developed the UPI instant payment system that enables seamless fund transfers.

These provisions will be applicable to public issues of securities that open on or after January 1, 2021.

Upon successful authorisation of the UPI mandate, funds equivalent to the application amount will be blocked in the investor's account, and confirmation will be sent to the investor.

Notification No : SEBI/HO/DDHS/CIR/P/2020/233
Source : https://www.sebi.gov.in/legal/circulars/nov-2020/introduction-of-unified-payments-interface-upi-mechanism-and-application-through-online-interface-and-streamlining-the-process-of-public-issues-of-securities-under-sebi-issue-and-listing-of-debt-_48235.html

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