Stock Market

Second phase of UPI mechanism for retail investors from July 1: Sebi

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Mumbai: The Securities and Exchange Board of India (Sebi) said on Friday the second phase of Unified Payments Interface (UPI) mechanism as an alternative for retail investors to invest in shares in a public issue will be effective from July 1. UPI is an instant payment system developed by the National Payments Corporation of India (NPCI), and it allows instant transfer of money between any two persons’ bank accounts using a payment address that uniquely identifies a bank account. The markets regulator said for applications by retail individual investors through intermediaries, the existing process of investor submitting bid-cum-application form with any intermediary along with bank account details, and movement of such application forms from intermediaries to self-certified syndicate Banks (SCSBs) for blocking of funds, will be discontinued, and only the UPI mechanism would be the permissible mode. “In Phase II, the existing timeline of T+6 days will continue, for a period of 3 months or floating of five main board public issues, whichever is later.

The implementation of Phase III shall continue unchanged as per the aforesaid Circular from the date of completion of Phase II,” Sebi said in a circular late on Friday. In November, Sebi said it will launch Unified Payments Interface as an alternative payment option for retail investors, buying shares in a public issue, in a phased manner from January 1, which will cut listing time for an IPO to three days from six then. On April 3, the implementation date was extended till June 30, so as to ensure smooth transition to UPI in Application Supported by Block Amount (ASBA). Earlier, retail investors either invest in an IPO through bank ASBA or through broker ASBA, where the broker did the bidding and handed over the application form to the investors bank.




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