The Securities and Exchange Board of India (SEBI) has extended the timeline for implementation of phase 1 of Unified Payments Interface (UPI) as an alternative mode of payment for retail investors participating in a public issue.
In the backdrop of representation received from various stakeholders and to ensure a smooth transition to UPI in ASBA (Application Supported by Block Amount), the SEBI in a circular said, "it has been decided to extend the timeline for implementation of Phase I... by 3 months i.e. till June 30, 2019."
It further said that the timelines for implementation of phase 2 and 3 shall remain unchanged.
In November last year, the market regulator had said that the UPI would be introduced, in a phased manner, as an alternative mode of payment for retail investor buying shares at an initial public offering (IPO) issue. The inclusion of the payment method would reduce the listing time for an IPO from the existing 6 days to 3. It will also increase the efficiency of the existing system, eliminating the need for manual intervention.
At present, retail investors either invest in an IPO through bank ASBA or through broker ASBA, where the broker bids on the investors' behalf and hands over the application form to their bank.
The process of physical movement of forms from the intermediaries to banks for blocking of funds will be discontinued under the UPI mechanism.