SEBI - Second phase of UPI mechanism for IPOs in place; Sebi provides list of banks

SEBI – Second phase of UPI mechanism for IPOs in place; Sebi provides list of banks:

Affle India IPO first to use new UPI mechanism; here’s how to invest

All applications through the UPI in IPOs can be made only through the SCSBs/mobile apps.

The Rs 459-crore initial public offer (IPO) by Affle India, a company in which Microsoft is a minority shareholder, will open for subscription on Monday.

This will be the first issue under the new UPI mechanism, which is mandatory for the retail investor category beginning July 1, 2019.

In a circular on Friday, the markets watchdog has also provided a list of 45 banks through which retail investors can apply for IPO using UPI mechanism.A list of Self-Certified Syndicate Banks (SCSBs) and mobile application has been issued in this regard.

SBI, HDFC Bank and Allahabad Bank are among the SCSBs.

Now, for applications by retail individual investors through intermediaries, the existing process of submitting bid-cum-application form with any intermediary along with bank account details has been discontinued.

Under that process, application forms were moved from intermediaries to SCSBs for blocking of funds, as per Sebi.

“For such applications, only the UPI mechanism would be the permissible mode,” the regulator said.

In November, the regulator said it would launch UPI as an alternate payment option for retail investors to buy shares in a public issue in a phased manner from January 1, 2019, a move that will cut listing time for an IPO to three days from six.

Streamlining the process, Sebi said applications through UPI for IPOs can be made only through SCSBs/mobile applications whose names appear on Sebi’s list.

An investor shall ensure that when applying for IPO using UPI, the name of his bank appears in the list of SCSBs displayed on the Sebi’s list which are live on UPI.

Further, he/she shall also ensure that the name of the app and the UPI handle being used for making the application is also appearing in the aforesaid list.

The regulator further said an application made using incorrect UPI handle or using a bank account of an SCSB or bank which is not mentioned in the aforesaid list is liable to be rejected.

Investors whose banks are not live on UPI as on the date of this circular, may use other alternate channels available to them like submission of application form with SCSB or using the facility of linked online trading, demat and bank account. Sebi added.