Securities and Exchange Board of India
CIRCULAR
Kee(am cBfiariwaj
General Manager
Division of Issues and Listing Phone: +91 22 26449350
mail: neelamb@sebi.gov.in
SEBI/CFD/DIL/DI P/31/2008/30/7
July 30, 2008
To All Stock Exchanges Dear Sirs,
Sub.: Additional mode of payment through Applications Supported by Blocked Amount (hereinafter referred to as “ASBA”)
1. In its continuing endeavour to make the existing public issue process more efficient, SEBI has decided to introduce a supplementary process of applying in public issues, viz., the “Applications Supported by Blocked Amount (ASBA)” process. The SEBI (Disclosure and Investor Protection) Guidelines, 2000 (hereinafter referred to as “the Guidelines”) have since been amended to provide for the ASBA process.
2. The ASBA process shall be available in all public issues made through the book building route. It shall co-exist with the current process, wherein cheque is used as a mode of payment.
3. The main features of ASBA process are as follows:
a. Meaning of ASBA: ASBA is an application for subscribing to an issue, containing an authorisation to block the application money in a bank account.
b. Self Certified Syndicate Bank (SCSB): SCSB is a bank which offers the facility of applying through the ASBA process. A bank desirous of offering ASBA facility shall submit a certificate to SEBI as per the format given in Annexure I, for inclusion of its name in SEBI’s list of SCSBs. The said list will be displayed by SEBI on its website at www.sebi.gov.in. ASBAs can be accepted only by SCSBs, whose names appear in the list of SCSBs displayed in SEBI”s website.
On inclusion in the list of SCSBs, a bank shall commence its activities as an SCSB w.e.f. the 1st or 15th of a month, whichever is earlier, from the date of such inclusion. It shall then be deemed to have entered into an agreement with the issuer and shall be required to offer the ASBA facility to all its account holders for all issues to which ASBA process is applicable.
A SCSB shall identify its Designated Branches (DBs) at which an ASBA investor shall submit ASBA and shall also identify the Controlling Branch (CB) which shall act as a coordinating branch for the Registrar to the Issue, Stock Exchanges and Merchant Bankers. The SCSB, its DBs and CB shall continue to act as such, for all issues to which ASBA process is applicable. The SCSB may identify new DBs for the purpose of ASBA process and intimate details of the same to SEBI, after which SEBI will add the DB to the list of SCSBs maintained by it. The SCSB shall communicate the following details to Stock Exchanges for making it available on their respective websites; these details shall also be made available by the SCSB on its website:
(i) Name and address of the SCSB
(ii) Addresses of DBs and CB and other details such as telephone number, fax number and email ids.
(iii) Name and contact details of a nodal officer at a senior level from the CB.
c. Eligibility of Investors: An Investor shall be eligible to apply through ASBA process,
if he/ she :
(i) is a “Resident Retail Individual Investor”;
(ii) is bidding at cut-off, with single option as to the number of shares bid for;
(iii) is applying through blocking of funds in a bank account with the SCSB;
(iv) has agreed not to revise his/her bid;
(v) is not bidding under any of the reserved categories.
Such investors are hereinafter referred as “ASBA investors”.
d. ASBA Process in brief: An ASBA investor shall submit an ASBA physically or electronically through the internet banking facility, to the SCSB with whom the bank account to be blocked, is maintained. The SCSB shall then block the application money in the bank account specified in the ASBA, on the basis of an authorisation to this effect given by the account holder in the ASBA. The application money shall remain blocked in the bank account till finalisation of the basis of allotment in the issue or till withdrawal/ failure of the issue or till withdrawal/ rejection of the application, as the case may be. The application data shall thereafter be uploaded by the SCSB in the electronic bidding system through a web enabled interface provided by the Stock Exchanges. Once the basis of allotment is finalized, the Registrar to the Issue shall send an appropriate request to the SCSB for unblocking the relevant bank accounts and for transferring the requisite amount to the issuer’s account. In case of withdrawal/ failure of the issue, the amount shall be unblocked by the SCSB on receipt of information from the pre-issue merchant bankers. The ASBA process is given in detail in Annexure II.
e. Obligations of the Issuer: The issuer shall ensure that adequate arrangements are made by the Registrar to the Issue to obtain information about all ASBAs and to treat these applications similar to non-ASBA applications while finalizing the basis of allotment, as per the procedure specified in the Guidelines.
f. Applicability of ASBA process: ASBA process shall be applicable to all book-built public issues which provide for not more than one payment option to the retail individual investors.
4. The details of the role and responsibilities of the Stock Exchanges in the ASBA process are given in Annexure III, for due compliance by the Stock Exchanges.
5. The roles and responsibilities of other intermediaries, viz., SCSBs, Registrars to the Issue and Merchant Bankers in the ASBA process are given in Annexure IV.
6. This circular shall come in to effect from the date to be specified by SEBI, once few eligible banks are recognized as SCSBs.
7. This circular and the entire text of the amended SEBI (DIP) Guidelines are available on SEBI website at www.sebi.gov.in under the categories “Legal Framework” and “Issues and Listing”.
Yours faithfully,
Neelam Bhardwaj
Downlo0ad Full Text of The Notification
