Streamlining the Process of Public Issues and redressal of Investor grievances - SEBI - SEBI/HO/CFD/DIL2/CIR/P/2022/51

CIRCULAR SEBI/HO/CFD/DIL2/CIR/P/2022/51 April 20, 2022 To Recognized Stock Exchanges Registered Stock Brokers Registered Merchant Bankers Registered Registrars to an Issue and Share Transfer Agents Depositories and Registered Depository Participants Registered Bankers to an Issue Self Certified Syndicate Banks (SCSBs) National Payments Corporation of India (NPCI) Dear Sir / Madam, Sub: Streamlining the Process of Public Issues and redressal of Investor grievances 1. SEBI vide Circular No. SEBI/HO/CFD/DIL2/CIR/P/2021/2480/1/M dated March 16, 2021 (hereinafter referred to as the March 21 Circular ), which came into effect from May 01, 2021, had put in place measures to have a uniform policy to further streamline the processing of the ASBA applications through UPI process among intermediaries/SCSBs. 2. Vide Circular dated June 02, 2021 , the implementation timelines for certain provisions of the Circular were deferred. Redressal of Investor grievances 3. The Circular provided a mechanism of compensation to investors for delay in unblocking of application amounts by SCSBs and has prescribed certain compliance and reporting standards to be adopted by SCSBs. 4. The performance of SCSBs on timely unblocking of application amounts has been reviewed and based on the feedback received from market intermediaries, a new reporting format for Annexure IV of the March 21 Circular has been devised to capture the data of all ASBA applications unblocked by SCSBs and their corresponding date of actual unblock. SCSBs shall submit the Annexure IV of the March 21 Circular in the format prescribed in Annexure IV of this circular. 5. It is reiterated that the SCSBs shall continue to compensate the investors for delays in unblocking of application amounts as per the compensation clause provided in the March 21 Circular. 6. The compensation prescribed in the March 21 Circular shall be applicable to all ASBA applications processed by the SCSBs. 7. Paragraphs 13 and 14 of the March 21 Circular stand modified to the extent stated above. Payment of Processing Fee to SCSBs 8. To claim the processing fee, SCSBs shall make an application to the Merchant Bankers with a copy to the Registrar to the Issue in the format prescribed in Annexure I of this circular (complete with requisite information mentioned therein) with a copy to the Registrar to the Issue, subject to the following conditions: a) The application shall be made no later than 30 days from the finalization of basis of allotment by Registrar to the Issue. b) The SCSBs shall make the application only after (i) unblocking of application amounts for each application received by such SCSB has been fully completed; (ii) applicable compensation relating to investor complaints has been paid by the SCSB. 9. The SCSBs shall continue to be responsible to provide information requested by the Merchant Bankers/ Registrar to the Issue/ Issuer and also remain liable to pay compensation applicable as per the Circular (including any amendments thereof), for delays in unblocking of application amounts after the processing fee has been claimed by the SCSBs. 10. Needless to state that SCSBs are liable to face appropriate action under Securities Laws for non-compliance with the requirements of this circular. SMS Alerts to Investors 11. The March 21 Circular has made provisions of sending timely information to investors through SMS Alerts for blocking and unblocking of application amounts. With regard to UPI applications, NPCI had approached SEBI with a proposal to include Invoice in the Inbox as one of the options for ensuring timely information to investors. 12. Accordingly, it has been decided that the SCSBs/UPI Apps eligible for Public Issues shall send SMS Alerts to Investors for all ASBA applications and may also provide the Invoice in the Inbox as an additional feature to verify the UPI mandate details. The SMS/Invoice in the Inbox shall include the details as prescribed in Annexure II. 13. Para 9 of the March 21 Circular and para 3.1 of the circular dated June 02, 2021 shall stand modified to the extent stated above. 14. This circular shall come into force with immediate effect. The provisions of this circular shall become part of the offer documents, DRHP and RHP. 15. This circular is being issued in exercise of the powers under section 11 read with section 11A of the Securities and Exchange Board of India Act, 1992. 16. This circular is available on SEBI website at www.sebi.gov.in under the categories Legal Framework and Issues and Listing . Yours faithfully, Vandana Joglekar Deputy General Manager +91-22-26449639 [email protected]