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TMI BlogAdditional mode of payment through Applications Supported by Blocked Amount (hereinafter referred to as “ASBA”)- Merchant BankersX X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 II, as per the specified format, 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CSB on receipt of information from the pre-issue merchant bankers. The ASBA process is given in detail in Annexure III. 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 Merchant Bankers in the ASBA process are given in Annexure IV, for due compliance by Merchant Bankers. 5. The roles and responsibilities of other intermediaries, viz., Registrars, Merchant Bankers and Stock Exchanges in the ASBA process are given in Annexure V. 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment option to the retail individual investors." 7. In clause 5.4.3.1, the words "being appointed" occurring after the word "intermediaries and before the word "are duly" shall be deleted. 8. In clause 5.4.3.1.1, the following proviso shall be inserted, namely:− "Provided that nothing contained in this clause shall apply in case of Self Certified Syndicate Bank." 9. In clause 5.4.3.1.2, in the end, the words "and also take note of the deemed agreement with the Self Certified Syndicate Banks as provided in the Application Supported by Blocked Amount process" shall be inserted. 10. In clause 5.7.1, after the words and comma "investors associations," and before the word "etc.", the words "Self Certified Syndicate Banks" shall be inserted. 11. After clause 5.9.2, the following clause shall be inserted, namely:− "5.9.3 In addition to the provisions of clause 5.9.1 and 5.9.2 above, in respect of issues where Application Supported by Blocked Amount process is applicable, all designated branches of Self Certified Syndicate Banks shall be deemed to be mandatory collection centres." 12. In clause 5.13.1 sub−clause (i), after the word "form" and before the word "dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause (ii), after the words "application form" and before the words "for inserting", the words "other than Applications Supported by Blocked Amount" shall be inserted. 24. In clause 6.19.2, in sub−clause (e), after the sub−clause (ii), the following sub−clause shall be inserted: "(iia) Provision in the Application form for Applications Supported by Blocked Amount, for inserting particulars relating to bank account number which is authorised to be blocked and other particulars as specified by SEBI in this regard." CHAPTER VII POST -ISSUE OBLIGATIONS 25. Clause 7.3.1, shall be substituted with the following, namely: "7.3.1 The Post − Issue Lead Merchant Banker shall actively associate himself with post− issue activities namely, allotment, refund, despatch and giving instructions to Self Certified Syndicate Banks and shall regularly monitor redressal of investor grievances arising therefrom" 26. In clause 7.4.1(i), after the word "branches," and before the word "processing", the words and the comma "Self Certified Syndicate Banks," shall be inserted. 27. In clause 7.4.1(i), the words "those accompanied by stockinvest" shall be replaced with the wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mely:− "(vii)(cc) In case of Applications Supported by Blocked Amount, the Self Certified Syndicate Banks shall follow the procedure specified by the Board in this regard." 34. In clause 11.3.1, in sub−clause (vii)(d), after the word and mark "brokerƒs" and before the words and mark "commissionƒfee", the mark and words "/Self Certified Syndicate Banks" shall be inserted. 35. In clause 11.3.1, in sub−clause (xiv), after the words "syndicate members", the words "and 'Self Certified Syndicate Banks'." shall be inserted. 36. In clause 11.3.1, in sub−clause (xvii)(a), after the words "syndicate members" and before the comma and words ", for each such category", the mark and words "/Self Certified Syndicate Banks" shall be inserted. 37. Clause 11.3.1, sub−clause (xx), shall be substituted with the following sub−clause, namely:− "(xx) Arrangement shall be made by the issuer for collection of the applications from mandatory collection centres as provided in clause 5.9 of the Guidelines." 38. In clause 11.3.1, sub−clause (xx)(a), after the word "infrastructure" and before the words "for data entry of bids", the words "with syn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Certified Syndicate Banks for redressal of their grievances" shall be inserted. 47. In clause 16.2.4.2, for sub−clause (b), the following shall be substituted, namely:− "(b) Satisfactory redressal of all complaints regarding all applications in the issue including Applications Supported by Blocked Amount received at the Board against the Company as cofirmed by the Registrar." 48. In clause 16.2.4.2, for sub−clause (c), the following shall be substituted, namely:− "(c) Certificate from the Designated Stock Exchange to the issuer company to the effect that underwriting/brokerage commission as well as fees of Registrars/Lead merchant bankers/Self Certified Syndicate Banks have been duly paid by the company." 49. In clause 16.2.4.5, in sub−clause (a), after the word "fees" and before the words "may be filed", the mark and words "/Self Certified Syndicate Banks" shall be inserted. SCHEDULE I (Clause 5.3.1.2) MEMORANDUM OF UNDERSTANDING BETWEEN THE LEAD MERCHANT BANKER TO THE ISSUE AND THE ISSUER COMPANY 50. In Schedule I, in Para 8, after the word "intermediaries" and before the words "or other persons", the words "(except Self Certified Syndicate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tem, through a web enabled interface, for uploading details of ASBA (hereinafter referred to as "the Stock Exchange(s)"). (iii) We have undertaken the mock trial run of our systems with the Stock Exchange(s) and Registrar(s) and have satisfied ourselves that we have adequate systemsƒ infrastructure in place at our Controlling Branchƒ Designated Branches to fulfill our responsibilitiesƒ obligations as envisaged in the ASBA process within the timelines specified therein. These responsibilitiesƒ obligations, inter−alia, include: a. Collection of physical andƒ or electronic ASBA from the ASBA investors. b. Capturing relevant details from the physical andƒ 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 withdrawalƒ failure of the issue or withdrawalƒ rejection of the application, as the case may be. 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. d. Ensuring that there is a pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proof of having accepted hisƒ her ASBA in a physical or electronic mode. Bidding period 3. If the bank account specified in the ASBA does not have sufficient credit balance to meet the application money, the ASBA shall be rejected by the SCSB. Bidding period 4. A. B. After accepting a Physical ASBA, the SCSB shall block funds available in the bank account specified in the Physical ASBA, to the extent of the application money specified in the ASBA. The SCSB shall then captureƒ upload the following details in the electronic bidding system provided by the Stock Exchange(s) for the particular public issue: (i) Application number (ii) DP ID Client ID (iii) Bid Quantity (iv) PAN In case of an Electronic ASBA, the ASBA investor himselfƒ herself shall fill in all the abovementioned details, except the application number which shall be system generated. The SCSB shall thereafter upload all the abovementioned details in the electronic bidding system provided by the Stock Exchange(s). Bidding period 5. The SCSB (Controlling Branch (CB) or DBs) shall generate a Transaction Registration Slipƒ Order number, confirming upload of ASBA details in the electroni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovide the following details to the CB of each SCSB, along with instructions to unblock the relevant bank accounts and transfer the requisite money to the issuer's account within the timelines specified in the ASBA process: (i) Number of shares to be allotted against each validASBA (ii) Amount to be transferred from the relevant bank account to the issuer's account, for each validASBA (iii) The date by which the funds referred to in sub−para (ii) above, shall be transferred to the issuer'saccount (iv) Details of rejected ASBAs, if any, along with reasons for rejection and details of withdrawnƒ unsuccessful ASBAs, if any, to enable SCSBs to unblock the respective bankaccounts. T+13 16. SCSBs shall unblock the relevant bank accounts for: (i) Transfer of requisite money to the issuer's account against each validASBA. (ii) Withdrawnƒ rejectedƒ unsuccessfulASBAs. The CB of each SCSB shall confirm the transfer of requisite money against each successful ASBA to the Registrar to the Issue. T+14 17. The Issuer shall make the allotment. T+15 18. The Registrar to the Issue shall credit the shares to the demat account of the successful ASBA investors. T+15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Provision for acknowledgment of receipt of ASBA. 6. Provision for signature of the applicant and of the account holder, if the account holder is different from the applicant. Annexure IV ROLE AND RESPONSIBILITIES OF MERCHANT BANKERS Role and responsibilities of Merchant Bankers shall include the following: 1. The pre−issue merchant banker(s) shall ensure that the ASBA process is provided as one of the modes of accepting bid−cum−application forms in all book built issues which provide for not more than one payment option to the retail individual investors. 2. The pre−issue merchant banker(s) shall ensure that appropriate disclosures are made regarding the ASBA process in the Red Herring Prospectus and abridged prospectus, to enable investors to understand and apply through the process. 3. The pre−issue merchant banker(s) shall ensure that sufficient number of Physical ASBA forms are printed and are made available to all SCSBs. Further, it shall ensure that SCSBs are also provided with a soft copy of the abridged prospectus. 4. The pre−issue merchant banker(s) shall intimate the bidƒ issue opening and closing dateƒ time to SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he details of a particular ASBA are uploaded only once in the electronic bidding system of any one of the Stock Exchange(s). SCSB shall be solely responsible for the completion and accuracy of all details enteredƒ uploaded on the electronic bidding system of the Stock Exchange(s). 7. In case of withdrawal of bids by ASBA investors during the bidding period, SCSB shall ensure deletion of the withdrawn ASBA from the electronic bidding system of the Stock Exchange(s) and unblocking of funds in the relevant bank account within the timelines specified in the ASBA process. 8. SCSB shall send the following aggregate information to the Registrar to the Issuer after the closure of the bidding period, within the timelines specified in the ASBA process: (i) Total number of ASBAs uploaded by the SCSB; and (ii) Total number of shares and total amount blocked against the uploaded ASBAs. 9. SCSB shall ensure that the bank accounts specified in the ASBAs are duly blocked to the extent of the application money till withdrawalƒ rejection of the ASBAs or receipt of instruction from the Registrar to the Issue for unblocking the bank accounts for the purpose of transferring the funds to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of acceptance of applications and finalisation of the basis of allotment. 2. Registrar to the Issue shall inform each Self Certified Syndicate Bank (SCSB) about errors, if any, in the bid details, along with an advice to send the rectified data within a specific date, which shall be specified by the Registrar. 3. Once the basis of allotment is approved by the Designated Stock Exchange, the Registrar to the Issue shall provide the following details to the Controlling Branch (CB) of each SCSB, along with instructions to unblock the relevant bank accounts and transfer the requisite money to the issuer's account within the timelines specified in the ASBA process: (i) Number of shares to be allotted against each valid ASBA. (ii) Amount to be transferred from the relevant bank account to the issuer's account, for each valid ASBA. (iii) The date by which the funds referred in sub−para (ii) above, shall be transferred to the issuer's account. (iv) Details of rejected ASBAs, if any, along with reasons for rejection and details of withdrawnƒ unsuccessful ASBAs, if any, to enable SCSBs to unblock the respective bank accounts. 4. The Registrar to the Issue sh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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