Executive Summary:
This SEBI circular provides revised timelines for implementing provisions of Circular No. SEBI/HO/CFD/DIL2/CIR/P/2021/2480/M dated March 16, 2021, regarding streamlining IPO processes with UPI in ASBA and investor grievance redressal, due to stakeholder requests for additional time amidst the Covid-19 pandemic. It details updated deadlines for SMS alerts, web portal functionality, and unblocking of UPI mandates, effective immediately. Key dates include October 1, 2021, and January 1, 2022, for specific provisions.
Key Points / Main Content:
* **SMS Alerts:**
* SCSBs must include details of the total number of shares applied/allotted/non-allotted in SMS alerts for Public Issues opening on or after January 01, 2022.
* **Web Portal for CUG:**
* The automated web portal hosted by Sponsor Banks for CUG entities shall be live and operational for Public Issues opening on or after October 01, 2021. Information must be updated periodically, not exceeding two-hour intervals.
* Until the automated portal is live, Sponsor Banks shall send details to CUG entities' email addresses periodically, not exceeding three-hour intervals. Exceptional events must be immediately communicated to CUG entities.
* Stock Exchanges and Lead Managers must provide requisite CUG entity data to Sponsor Banks before the opening of the Public Issue.
* **Completion of Unblocks by T4:**
* Revised timelines for completing unblocks pertaining to UPI mandates:
* Registrar to the Issue must provide allotment/revoke files to the Sponsor Bank by 8:00 PM on T3.
* Sponsor Bank must execute the online mandate revoke file and provide pending applications for unblock to the Registrar to the Issue, not later than 5:00 PM on BOA+1.
* Registrar to the Issue must submit bank-wise pending UPI applications for unblock to the SCSBs, not later than 6:30 PM on BOA+1.
* Lead Managers must continuously address the matter with SCSBs at appropriate levels to ensure unblocking is completed on T4.
* **General:**
* The contents of the circular shall be mentioned in the DRHP and RHP filed on or after the date of this circular.
Impact Analysis:
* **SCSBs (Self-Certified Syndicate Banks):**
* *Impact:* Need to adjust systems to comply with revised timelines for SMS alerts and UPI mandate unblocking.
* *Action Required:* Update SMS alert formats by January 1, 2022, and adhere to revised unblocking timelines.
* **Sponsor Banks:**
* *Impact:* Responsible for hosting and maintaining the web portal for CUG entities and adhering to revised timelines.
* *Action Required:* Ensure the web portal is live by October 1, 2021, and in the interim, send information to CUG entities via email. Also, execute online mandate revoke files as per revised timelines.
* **Registrars to the Issue:**
* *Impact:* Must provide allotment/revoke files to Sponsor Banks and bank-wise pending UPI applications to SCSBs as per revised timelines.
* *Action Required:* Adjust internal processes to meet the revised deadlines for file submissions.
* **Lead Managers:**
* *Impact:* Responsible for facilitating data to Sponsor Banks and ensuring unblocking is completed on T4.
* *Action Required:* Provide requisite CUG entity data to Sponsor Banks and continuously follow up with SCSBs regarding unblocking.
* **Stock Exchanges:**
* *Impact:* Must provide requisite CUG entity data to Sponsor Banks.
* *Action Required:* Provide requisite CUG entity data to Sponsor Banks.
* **Investors:**
* *Impact:* Benefit from a more streamlined IPO process and a clear mechanism for redressal of grievances.
* *Action Required:* Be aware of the updated timelines and processes for UPI-based IPO applications.
Key Entities Referenced
SEBI: Securities and Exchange Board of India, the regulatory body issuing the circular.
UPI: Unified Payments Interface, a real-time payment system.
ASBA: Applications Supported by Blocked Amount, a process for applying to IPOs.
IPOs: Initial Public Offerings, the process of offering shares of a private corporation to the public for the first time.
Merchant Bankers: Intermediaries involved in managing public offerings.
Stock Exchanges: Recognized entities where securities are traded.
Registrars to an Issue and Share Transfer agents: Entities responsible for managing the IPO application process and share transfers.
SelfCertified Syndicate Banks (SCSBs): Banks authorized to block funds for ASBA applications.
1
SEBI/HO/CFD/DIL2/P/CIR/2021/570 June 02, 2021
To
Registered Merchant Bankers
Recognized Stock Exchanges
Registered Registrars to an Issue and Share Transfer agents
Bankers to an Issue (Self-Certified Syndicate Banks)
Dear Sir / Madam,
Sub: Streamlining the process of IPOs with UPI in ASBA and redressal of
investor grievances
1. SEBI vide Circular No. SEBI/HO/CFD/DIL2/CIR/P/2021/2480/1/M dated March
16, 2021 (hereinafter referred to as “the circular”), which came into effect from
May 01, 2021 had put in place measures to have a uniform policy to further
streamline the processing of ASBA applications through UPI process among
intermediaries/SCSBs and also provided a mechanism of compensation to
investors.
2. The stakeholders have approached SEBI seeking additional time for
implementing the system changes given the prevailing uncertainty due to the
Covid-19 pandemic.
3. In view of the representations received from stakeholders, the implementation
timelines for the provisions of “the circular” shall be as under:
3.1 SMS Alerts: Para 9 of “the circular” prescribed the details to be sent by
SCSB’s in SMS alerts. While SCSB’s shall continue to send SMS alerts
during the actual block/debit/unblock of UPI mandate in the prescribed
format, the details of total number of shares applied/allotted/non-allotted2
etc shall be included in SMS for Public Issues opening on/after January 01,
2022.
3.2 Web Portal for CUG: For ease of doing business, Para 10 of “the circular”
prescribed a web portal to be hosted by Sponsor Banks for closed user
group (hereinafter referred to as “CUG”) entities. In view of the
representations received from the stakeholders, it has been decided that:
3.2.1 The automated web portal shall be live and operational after
due testing and mock trials with the CUG entities for Public Issues
opening on or after October 01, 2021. The requisite information on
this automated portal shall be updated periodically in intervals not
exceeding two hours.
3.2.2 In the interim, for the Public Issues opening from the date of
this circular and till the automated web portal is live and operational,
the Sponsor Banks shall send the details prescribed in Para 10 of
“the circular” to the e-mail address of CUG entities periodically in
intervals not exceeding three hours. In case of exceptional events
viz., technical issues with UPI handles/PSPs/TPAPS/SCSB’s etc, the
same shall be intimated immediately to the CUG entities so as to
facilitate the flow of information in the Public Issue process.
3.2.3 The Stock Exchanges and Lead Managers shall facilitate
providing the requisite data of CUG entities to Sponsor Bank for the
development of automated web portal. Such information shall be
provided to the Sponsor Bank before opening of the Public Issue.
3.3 Completion of Unblocks by T+4: Para 13 of “the circular” prescribed the
process and timeline for ensuring the completion of unblocks pertaining to
UPI mandates on T+4 (T: Issue Closing Date). while the process of
unblocking shall be completed by T+4, in view of the representations
received from stakeholders, the following shall be the revised timelines:
3.3.1 The Registrar to the Issue shall provide the allotment/ revoke
files to the Sponsor Bank by 8:00 PM on T+3 i.e, the day when the
Basis of Allotment (BOA) has to be finalized.3
3.3.2 The Sponsor Bank shall execute the online mandate revoke file
for Non-Allottees/ Partial Allottees and provide pending applications
for unblock, if any, to the Registrar to the Issue, not later than 5:00
PM on BOA+1.
3.3.3 Subsequent to the receipt of the pending applications for
unblock from the Sponsor Bank, the Registrar to the Issue shall
submit the bank-wise pending UPI applications for unblock to the
SCSBs, not later than 6:30 PM on BOA+1.
3.3.4 To ensure that the unblocking is completed on T+4, the Lead
Managers, on a continuous basis and before the opening of the
public issue shall take up the matter with the SCSB’s at appropriate
level.
4. This circular comes into force with immediate effect.
5. The contents of the circular shall be mentioned in the DRHP and RHP filed on
or after the date of this circular.
6. This circular is being issued in exercise of the powers under section 11 read
with section 11A of the Securities and Exchange Board of India Act, 1992.
7. This circular is available on SEBI website at www.sebi.gov.in under the
categories “Legal Framework” and “Issues and Listing”.
Yours faithfully,
Rajesh Kumar D
Chief General Manager
+91-22-26449242
rajeshkd@sebi.gov.in