SEBI allows additional payment modes for Payment of Balance Money in Calls for Partly Paid Securities [Read Circular]

The Securities and Exchange Board of India (SEBI) has allowed additional payment modes including  Application Supported by Blocked Amount (ASBA) for Payment of Balance Money in Calls for partly paid securities issued by the listed entity.

This circular will be applicable for all call money notice wherein the payment period opens on or after January 1, 2020.

The Market Regulator SEBI, in its endeavour to protect investors’ interest and reduce investor grievances relating to refund, introduced ASBA as the sole payment mechanism in the IPO and Rights issues.

“Considering that payment through ASBA mechanism is investor-friendly and enables faster completion of the process, it has been decided to introduce additional payment mechanism (i.e. ASBA, etc) for making subscription and/or payment of calls in respect of partly paid specified securities through SCSBs and intermediaries such as Trading Members/ Brokers – having three in one type account and Registrar and Transfer agents (RTA),” the SEBI in the circular said.

The additional payment methods provided by SEBI are online as well as physical ASBA and the facility of linked online trading, demat and bank account (three-in-one type) accounts offered by some brokers.

Investors can apply through an online portal of the self-certified syndicate banks (SCSBs) or physically submit applications at the branch of a SCSB.

The SCSBs would then send the application to RTA and block funds in shareholders accounts. Sebi said payment period for payment of balance money in calls will be kept open for 15 days.

The Regulator, further, said intermediaries including the issuer company and its RTA would provide necessary guidance to the specified security holders in use of ASBA mechanism while making payment of calls.