SEBI recently came up with new and fresh guidelines that specifically pertains to refund of partially allotted and unallotted applications concerning Rights Issue. These guidelines were issued vide Circular No. SEBI/HO/CFD/DIL2/CIR/P/2021/552 Dated: April 22, 2021 and Crux of this Circular is as follows:-
♦ Now the applications are allowed to be received only through one mode, i.e. ASBA (Application Supported by Block Amount), wherein the bidders in advance provide a specific instructions to their banks of blocking a particular bid amount in their official ASBA accounts.
♦ The Issuer, with Lead Manager and other important intermediaries have to ensure that the refund of the above mentioned type of applications gets finished on or before T+1 Day, and at the same time needs to keep one thing in their mind that the concerned data’s of such applications remain error-free to avoid any kind of technical rejections at later period.
♦ In addition to the above point, if in any case, the situation of technical rejection of such refund applications arises, the same has to be addressed in a speedy manner.
♦ In order to done away with the ASBA facility till the time the COVID-19 situation persists, and to eradicate the problem of cash based blocking system, here the SEBI has suggested the Issuers, Lead Managers and concerned intermediaries to formulate a non-cash based mechanism to accept such applications, but have clearly stated two additional points that this mechanism isn’t to replace the existing mechanism and is just an additional option owing to current situation, and no third party payments mode is allowed here.
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