Custom Search

Saturday, April 30, 2011

ASBA to be mandatory from May 2

Mumbai: All non-retail investors will have to use the ASBA facility - where money is debited from investor's account only after share allotment - the date being from May 2 to apply for share sale offers in the capital market, Sebi said today.

Under the Application Supported By Blocked Amount (ASBA) facility, the application money of investors remains blocked in his bank account until the process of allotment of shares is completed.

"It has been decided that non-retail investors i.e., qualified institutional buyers and non-institutional investors, making application in public or rights issue shall mandatorily make use of ASBA facility," Sebi said.

The Securities and Exchange Board of India (Sebi) had introduced ASBA facility for public offers first in September 2008, when retail investors were allowed to use it.

The facility eliminates any delays related to refunds for the unallotted shares. Initially, it was offered to retail investors only and was given to other investors in 2009.

"The circular shall be applicable for Red herring Prospectus/ Letter of offer filed with registrar of Companies or stock exchanges on or after May 2, 2011," Sebi added.

Sebi, however, did not make it mandatory for retail investors to use the ASBA facility.

Source: Financial Express


Post a Comment

Popular Posts

Desi Google | A2Z Famous Quotes | What's Cooking America | Joke Site