Streamlining the process of IPOs with UPI in ASBA and redressal of investors grievances

Last updated: 18 March 2021

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The Securities and Exchange Board of India (SEBI) is introducing measures to improve the Initial Public Offering (IPO) process when using the Unified Payment Interface (UPI) with ASBA. This aims to address issues like delayed fund unblocking for investors, especially in cases of non-allotment or partial allotment. New timelines and a compensation mechanism are being put in place to ensure funds are unblocked promptly and investors are compensated for any delays.

Securities and Exchange Board of India SEBI/HO/CFD/DIL2/CIR/P/2021/2480/1/M March 16, 2021 To Registered Merchant Bankers Recognized Stock Exchanges Registered Registrars to an Issue and Share Transfer Agents Self-Certified Syndicate Banks Dear Sir / Madam, Sub:Streamlining the process of IPOs with UPI in ASBA and redressal of investor grievances 1. SEBI videcircular SEBI/HO/CFD/DIL2/CIR/P/2018/138 dated November 01, 2018introduced the use of Unified Payment Interface as

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FAQ :

The main goal is to streamline the IPO process using UPI in ASBA, improve the unblocking of funds for investors, and establish a better mechanism for redressing investor grievances.

The circular addresses issues such as delays in blocking funds, failure to unblock funds for cancelled or withdrawn applications, delays in unblocking funds after allotment finalisation, and instances where banks block incorrect amounts.

For non-allotted or partially allotted applications, Sponsor Banks must execute the online mandate revoke file by BOA+1 (Basis of Allotment plus one day). SCSBs must ensure funds are unblocked by the closing hours of the bank day on BOA+1.

Yes, a compensation structure is in place. SCSBs must compensate investors immediately upon receiving a complaint for delays, with additional compensation applicable for further delays beyond the complaint receipt date.

Lead Managers are designated as the nodal entity and are responsible for ensuring that intermediaries adhere to the defined timelines, processes, and compensation policies.

These provisions will come into force for IPOs opening on or after May 1, 2021.