Sebi asks market intermediaries to comply with ASBA norms
Mumbai: Sebi on Wednesday asked merchant bankers and intermediaries to ensure that disclosures made in all offer documents submitted after March 1, 2013, should be compliant with norms in place for Application Supported by Blocked Amount (ASBA) facility.
ASBA facility allows the application money to remain blocked in the applicant's bank account till the time the shares are actually allotted in the public offers.
In a circular today, Securities and Exchange Board of India (Sebi) has also directed all market intermediaries to comply with the various guidelines related to ASBA facility.
"This circular shall be applicable for Red Herring Prospectus/ Prospectus/Letter of Offer filed with Registrar of Companies/ Stock Exchanges, as the case may be, on or after March 1, 2013," Sebi said.
According to the market regulator, merchant bankers should ensure that appropriate disclosures are made in the offer document in this regard.
Among others, Sebi had introduced an additional mechanism for investors to submit application forms in public issues using the stock broker network of stock exchanges, who may not be syndicate members in an issue.
In a circular, issued in October last year, Sebi had said that such a facility to "submit the application forms in more than 1000 locations which are part of the nationwide broker network of the Stock Exchanges, by March 1, 2013".
ASBA facility eliminates any delays related to refunds for the unallotted shares. Initially, the facility was offered to retail investors only and was given to other investors in 2009.