ASBA Phase II – Facility extended to HNIs and corporate investors

SEBI vide PR No.386/2009 dated December 10, 2009 has extended the ASBA (Application Supported by Blocked Amount) facility to investor categories like High Networth Individuals (HNIs), corporate investors etc. (referred as ASBA Phase II). Thus all investors, except Qualified Institutional Buyers (QIBs) will be eligible to apply for public / rights issues using ASBA facility. The restrictions placed on investors under ASBA Phase- I viz. that only retail investors can apply and that too only at cut-off, that there shall be not more than one bid, that bids cannot be revised etc. will no longer be there under ASBA Phase II. ASBA Phase II will be applicable to all the issues opening on or after January 01, 2010.

SEBI in August, 2008 had introduced the new mode of payment in public issues called ASBA (now referred to as ASBA phase I), wherein the application money remains blocked in the bank account till allotment. Later in August, 2009 SEBI had extended the ASBA facility to rights issue. This decision was in furtherance of the SEBI’s decision to cut short the time period for allotment of shares in rights issue to 15 days from the previous 45 days. The application forms for this payment mode are to be submitted to banks whose names appear in the list of Self Certified Syndicate Banks on the SEBI website. Since the introduction of ASBA, it has been implemented in more than twenty issues.

A copy of the press release is available here.