Sebi makes ASBA facility mandatory for new issues, revises application form

Market regulator Securities and Exchange Board of India (Sebi) on Friday issued a revised form for Application Supported Blocked Amount (ASBA) facility for investors applying for public issue of shares by companies.

Sebi has made the ASBA facility mandatory for all categories of investors applying for a public issue for making payment from Friday.

With the ASBA facility, investors can bid for shares without remitting the amounts as the money will remain in their applicants' accounts till the time the shares are finally allotted.

In a circular, Sebi said the application form for ASBA would be printed in a booklet form of A4 size paper.

Besides, Sebi has prescribed white-coloured form for resident Indians, NRIs applying on a non-repatriation basis and blue forms for NRIs, foreign venture capital investor, foreign institutional investors, their sub-accounts (other than sub-accounts, which are foreign corporates or foreign individuals bidding under the QIB Portion), on a repatriation basis.

It further said that top of the application form will have a coloured identifier strap incorporating the name of the issuer, ISIN (International Securities Identification Number) and type of form (Repatriation, Non Repatriation).

Besides, the main application should have information about eight digit application number, PAN number, bidders depository account details, investor category, among others.

A confirmation by the applicant (on behalf of joint bidders) that he/she has read, understood and agrees to such confirmations is also required.

The application should also highlight the different category of investors (retail, non-institutional and QIBs), number of equity shares (reservation if applicable), percentage of issue available for allotment, basis of allocation in case of over-subscription, mode of allotment and terms of payment.

The new circular will be applicable for all public issues opening on or after January 1, 2016, Sebi said.

The regulator had, in August, made ASBA facility mandatory for all categories of investors applying for a public issue.

Sebi had also allowed the Registrar and Share Transfer Agents (RTAs) and Depository Participants (DPs) to accept application forms (both physical as well as online).

The number of bank branches with ASBA facility has now increased to about 95,500, from 9,800 when this facility was introduced.