SEBI asks QIBs, NIIs to take `application supported by blocked amount' route to public issues

Non-retail investors such as qualified institutional buyers (QIBs) and non-institutional investors (NIIs) making applications in public or rights issues have to mandatorily use the Application Supported by Blocked Amount (ASBA) facility with effect from 1 May 2011.

The Securities and Exchange Board of India (SEBI) board, at its meeting yesterday, while announcing this also said it has limited initial registration period of intermediaries to five years.

"Intermediaries would be granted registration initially for a period of five years. On assessment of the performance of the intermediary and its track record during the initial five years, it will be granted registration on a permanent basis," SEBI said in a notification.

The currency derivative segment would have self clearing members. They would be required to have net worth of  Rs5 crore.

In order to protect small and diversified shareholders in listed companies from abusive related party transactions, SEBI has proposed suitable amendments to the Companies Bill 2009.

SEBI said it would recommend to the ministry of corporate affairs to suitably amend Clause 166 of the Companies Bill, 2009 to disallow interested shareholders from voting on the special resolution of the prescribed related party transaction.

This view was taken based on the learning from the investigation in the matter of Satyam Computer Services Limited.