Sebi Streamlines IPO Application Process; Comes Up With New Guidelines

On Tuesday, the capital market watchdog SEBI issued guidel¬ines with an aim to deal with grievances of IPO investors and in particular of those making payments via the unified payment interface (UPI) route.

Sebi Streamlines IPO Application Process; Comes Up With New Guidelines

SEBI made note of key concern areas that are coming in the way of smooth UPI transaction for IPO investment and notified operational guidelines for resolving the same.

As per the new norms, investment bankers as well as brokers will be liable for any lapses and would need to compensate IPO applicants by paying Rs. 100 per day or 15 percent per annum interest on the IPO application amount, whichever is higher.

The new framework would address issues related to delay in receipt of mandate by investors for blocking of funds due to systemic issues at intermediaries and failure to unblock the funds in cases of partial allotment by the next working day from the finalisation of Basis of Allotment (BOA), Sebi said in a circular.

Further other issues that would be taken care of include Self Certified Syndicate Bank (SCSB) blocking multiple amounts for the same Unified Payment Interface (UPI) application and SCSB blocking more amount in the investors account than the application amount.

"Lead managers shall ensure that the payment of processing fee/selling commission to the intermediaries be released only after ascertaining that there are no pending complaints pertaining to block/unblock of UPI bids, receiving the confirmation on completion of unblocks," Sebi has said.

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