The Securities and Exchange Board of India (SEBI) on November 23, 2020 has issued a Circular introducing Unified Payments Interface (UPI) mechanism and Application through Online interface and Streamlining the process of Public issues of securities under:
• SEBI (Issue and Listing of Debt Securities) Regulations, 2008 (ILDS Regulations),
• SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013 (NCRPS Regulations),
• SEBI (Issue and Listing of Securitised Debt Instruments and Security Receipts) Regulations, 2008 (SDI Regulations) and
• SEBI (Issue and Listing of Municipal Debt Securities) Regulations, 2015 (ILDM Regulations)
Process flow for applying though UPI mechanism data required and roles of the stakeholders are as follows:-
• Modes of application in public issue of securities as mentioned in this circular: Through Self-Certified Syndicate Bank (SCSB) or intermediaries or Through Stock Exchanges (App/ Web interface)
• There are three processes for investor application submitted with UPI as mode of payment; Bidding and validation process, The Block process and Post issue closure.
• Data fields required in Application and Bidding Form relating to UPI include; Payment details–UPI ID with maximum length of 45 characters, acknowledgement Slip for SCSB / Broker / RTA / DP, and acknowledgement Slip for bidder.
• The Role of the Issuer is to maintain a single escrow account for collecting application money through all the methods. Issuer shall appoint one of the SCSBs as Sponsor Bank to act as council between Stock Exchanges and NPC.
• The Role of the Registrar is to collect aggregate applications details from the stock exchanges platform to decide the eligible applications and process the allotment as per applicable SEBI Regulations. Registrar shall also credit securities to all valid allottees.
• The Role of the Stock Exchange is to provide a platform for making applications. The Stock Exchange shall be responsible for addressing investor grievances arising from applications submitted online through the App based/ web interface platform of stock exchange or through their Trading Members
• The Role of the Intermediaries is to address any investor grievances arising from the applications uploaded by them in respect of quantity, price or any other data entry or other errors made by them.
• The Role of the Collecting Bank is to address any investor grievances arising from non-confirmation of funds to the Registrar despite successful realization of the payment instrument in favour of the issuer’s Escrow Account, or any delay or operational lapse by the Collecting Bank in sending the forms to the Registrar.
SEBI Circular no.: CIR/IMD/DF-1/20/2012 dated July 27, 2012 on System for Making Application to Public issue of Debt Securities shall stand repealed from that date. The provisions of this ircular shall be applicable to a public issue of securities under the captioned Regulations which opens on or after January 01, 2021.
[Circular No.: SEBI/HO/DDHS/CIR/P/2020/233]
