TMI BlogStreamlining the Process of Public Issue of Equity Shares and convertiblesX X X X Extracts X X X X X X X X Extracts X X X X ..... e process, it has been decided, in consultation with the stake holders to introduce the use of Unified Payments Interface (UPI) as a payment mechanism with Application Supported by Block Amount (ASBA) for applications in public issues by retail individual investors through intermediaries (Syndicate members, Registered Stock Brokers, Registrar and Transfer agent and Depository Participants). The proposed process would increase efficiency, eliminate the need for manual intervention at various stages, and will reduce the time duration from issue closure to listing by upto 3 working days. 3. Considering the time required for making necessary changes to the systems and to ensure complete and smooth transition to UPI payment mechanism, the proposed alternate payment mechanism and consequent reduction in timelines is proposed to be introduced in a phased manner as under: 3.1 Phase I : From January 01, 2019, the UPI mechanism for retail individual investors through intermediaries will be made effective along with the existing process and existing timeline of T+6 days. The same will continue, for a period of 3 months or floating of 5 main board public issues, whichever is later. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existing process of uploading of bid and blocking of funds in investors account by the SCSB would continue. Investor may submit the bid-cum-application form online using the facility of linked online trading, demat and bank account (3-in-1 type accounts), provided by some of the brokers. Investor may submit bid-cum-application form with any of the intermediary, along with details of his/her bank account for blocking of funds. For such applications, the intermediary would upload the bid in stock exchange bidding platform and forward the application form to a branch of SCSB for blocking of funds.* A RII would also have the option to submit bid-cum-application form with any of the intermediary and use his / her UPI ID for the purpose of blocking of funds. Qualified Institutional Buyer (QIB) Not applicable Non Institutional Investor (NII) Not applicable 5.2 *For Phase II and Phase III, the RIIs will have the option to use only Channel I, II and IV for making application in a public issue. 6. Timelines 6.1 An indicative process flow for applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lic issues. 10.2 Applications made using third party bank account or using third party linked bank account UPI ID are liable for rejection. 10.3 Sponsor Bank shall provide the investors UPI linked bank account details to RTA for purpose of reconciliation. 10.4 RTA shall undertake technical rejection of all applications to reject applications made using third party bank account. 11. Obligations of the Issuer 11.1 The issuer shall appoint one of the SCSBs as Sponsor Bank to act as a conduit between the Stock Exchanges and NPCI in order to push the mandate collect requests and / or payment instructions of the retail investors into the UPI; 11.2 The Sponsor Bank appointed by the issuer may be the same as the bank with whom the public issue account has been opened. 12. Other requirements 12.1 The details of commission and processing fees payable to each intermediary and the timelines for payment shall be disclosed in the offer document. 12.2 The intermediaries shall provide necessary guidance to their investors in use of UPI while making applications in public issues. 12.3 All entities involved in the process shall co-ordinate with one another to ensure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Channels of submission of application forms 1.1. A retail individual investor (RII) can submit the application for subscribing to a public issue through the following channels: 1.1.1. Application submitted with Self Certified Syndicate Bank (SCSB) i.e. RIIs bank (i) A RII may submit the bid-cum-application form, with ASBA as the sole mechanism for making payment, physically at the branch of a SCSB, i.e. RII s bank, or online, if such facility is provided by the SCSB. (ii) For such applications, the existing process of uploading of bid and blocking of funds in RII account by the SCSB would continue. 1.1.2. Application submitted with Intermediary (i) A RII would continue to have the option to submit the bid-cum-application form online using the facility of linked online trading, demat and bank account (3-in-1 type accounts), provided by some of the brokers. (ii) RII would also continue to have the option of submission of bid-cum-application form with any of the intermediary, along with details of his/her bank account for blocking of funds. In such case, the intermediary would upload the bid in stock exchange bidding platform and forward the application for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mobile app, associated with UPI ID linked bank account. Graphical illustrative process of the investor receiving and approving mandate request 2.2.4. The RII would be able to view the amount to be blocked as per his / her bid in such intimation. The RII would also be able to view an attachment wherein the IPO bid details submitted by RII will be visible. After reviewing the details properly, RII would be required to proceed to authorize the mandate. Such mandate raised by sponsor bank would be a one-time mandate for each application in the IPO. 2.2.5. Upon successful validation of block request by the RII, as above, the said information would be electronically received by the RIIs bank, where the funds, equivalent to application amount, would get blocked in RIIs account. Intimation regarding confirmation of such block of funds in RIIs account would also be received by the RII. 2.2.6. The information containing status of block request (e.g. accepted / decline / pending) would also be shared with the Sponsor Bank, which in turn would be shared with stock exchange. The block request status would also be displayed on stock exchange platform for informati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ails of activities Due Date (working day*) 1. An investor, intending to subscribe to a public issue, shall submit a completed bid-cum-application form to any of the following entities: i. an SCSB, with whom the bank account to be blocked, is maintained ii. a syndicate member (or sub-syndicate member) iii. a stock broker registered with a recognised stock exchange (and whose name is mentioned on the website of the stock exchange as eligible for this activity) ( broker ) iv. a depository participant ( DP ) (whose name is mentioned on the website of the stock exchange as eligible for this activity) v. a registrar to an issue and share transfer agent ( RTA ) (whose name is mentioned on the website of the stock exchange as eligible for this activity) Retails investors submitting application with any of the entities at (ii) to (v) above (hereinafter referred as Intermediaries ), and intending to use UPI, shall also enter their UPI ID in the bid-cum-application form. Issue opening date to issue closing date (where T is issue closing date) 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate) 5. Stock exchange(s) shall allow modification of selected fields (till 01:00 PM) in the bid details already uploaded. For retail applications submitted to intermediaries without UPI and QIB NII application submitted to intermediaries: Intermediaries to forward a schedule as per format given below along with the application forms to designated branches of the respective SCSBs for blocking of funds. Field No. Details 1. Symbol 2. Intermediary Code 3. Intermediary Name 4. Bank Code 5. Bank Name 6. Location Code 7. Application No 8. Category ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... listing application, allotment details and demat credit and refund details for the purpose of listing permission. Registrar shall reconcile the compiled data received from the stock exchange(s), all SCSBs and Sponsor Bank (hereinafter referred to as the reconciled data ). Registrar shall reject multiple applications determined as such, based on common PAN. Registrar to undertake Technical Rejection test based on electronic bid details and prepare list of technical rejection cases. T+2 7. Finalisation of technical rejection and minutes of the meeting between issuer, lead manager, registrar. Registrar shall finalise the basis of allotment and submit it to the designated stock exchange for approval. Designated Stock Exchange(s) to approve the basis of allotment. Registrar to prepare funds transfer schedule based on approved basis of allotment. Registrar / Issuer to initiate corporate action to carry out lock-in for pre-issue capital held in depository system. Registrar and merchant banker to issue funds transfer instructions to SCSBs and Sponsor Bank. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ix. a depository participant ( DP ) (whose name is mentioned on the website of the stock exchange as eligible for this activity) x. a registrar to an issue and share transfer agent ( RTA ) (whose name is mentioned on the website of the stock exchange as eligible for this activity) Retails investors submitting application with any of the entities at (ii) to (v) above (hereinafter referred as Intermediaries ), and intending to use UPI, shall also enter their UPI ID in the bid-cum-application form. Issue opening date to issue closing date (where T is issue closing date) 2. The aforesaid entities shall, at the time of receipt of application, give an acknowledgement to investor, by giving the counter foil or specifying the application number to the investor, as a proof of having accepted the application form, in physical or electronic mode, respectively. (iv) For applications submitted to SCSB : After accepting the form, SCSB shall capture and upload the relevant details in the electronic bidding system as specified by the stock exchange(s) and block funds available in the bank account specified in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficate) to the registrar through stock exchange. For QIB NII application submitted to intermediaries: Intermediaries to forward a schedule as per format given below along with the application forms to designated branches of the respective SCSBs for blocking of funds. Intermediaries to forward a schedule as per format given below along with the application forms to designated branches of the respective SCSBs for blocking of funds. Field No. Details 1. Symbol 2. Intermediary Code 3. Intermediary Name 4. Bank Code 5. Bank Name 6. Location Code 7. Application No 8. Category 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istrar to prepare funds transfer schedule based on approved basis of allotment. Registrar / Issuer to initiate corporate action to carry out lock-in for pre-issue capital held in depository system. Registrar and merchant banker to issue funds transfer instructions to SCSBs and Sponsor Bank. T+3 8. Registrar to receive confirmation for pre-issue capital lock-in from depositories. SCSBs and Sponsor Bank to credit the funds in public issue account of the issuer and confirm the same. Issuer shall make the allotment. Registrar / Issuer to initiate corporate action for credit of shares to successful allottees. Issuer and registrar to file allotment details with designated stock exchange(s) and confirm all formalities are complete except demat credit. Registrar to send bank-wise data of allottees, amount due on shares allotted, if any, and balance amount to be unblocked to SCSBs and Sponsor Bank. T+4 9. Registrar to receive confirmation of demat credit from depositories. Issuer and registrar to file confir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll our responsibilities/ obligations as envisaged in the ASBA facility within the timelines specified therein. These responsibilities/ obligations, inter-alia, include: a. Collection of physical and/ or electronic ASBA from the ASBA investors. b. Capturing relevant details from the physical and/ or electronic ASBA. c. Blocking funds to the extent of application money in the bank account specified in the ASBA till finalisation of the basis of allotment or withdrawal/failure of the issue or withdrawal/ rejection of the application, as the case may be. d. Uploading details of the ASBA in the electronic bidding system of the Stock Exchange(s), sending to and receiving from the Registrar(s) data pertaining to the ASBA and the issue, in a secured form. e. Ensuring that there is a proper segregation of applications/ amount/ data issue- wise in respect of various issues that may be open simultaneously. f. Unblocking funds in the bank account specified in the ASBA upon receipt of request from Registrar(s) and releasing the funds in favour of the issuer or unblocking of funds on withdrawal/ rejection of the ASBA, and g. Unblocking funds in the bank account specified in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an arrangement with at least one of the stock exchange(s) that provides the electronic bidding system, through a web enabled interface, wherein the stock exchange will be able to share the bid details along with the investors UPI ID; (xiii) We hereby confirm that we have completed the UPI 2.0 certification process with National Payments Corporation of India (NPCI) as an Issuer/Issuer Acquirer/Acquirer. We have also received a sign off from NPCI on same for go live and are interested to become a Sponsor Bank. (xiv) We have undertaken the mock trial run of our systems for acting as Sponsor Banks for ASBA, with the Stock Exchange(s) and Registrar(s) and have satisfied ourselves that we have adequate systems/ infrastructure in place to fulfill our responsibilities/ obligations as envisaged in the role of a Sponsor Bank in the ASBA facility within the timelines specified therein. These responsibilities/ obligations, inter-alia, include: a. To initiate the mandate collect requests to all investor PSPs with the proper tags; b. To send back the file to the exchanges containing status of blocking for all investors; c. To initiate the debit requests post finalization of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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