Sebi gives more time for implementation of SMS alerts for IPO process via UPI system

New Delhi: Sebi on Wednesday gave more time for implementation of guidelines pertaining to SMS alerts under the Unified Payment Interface (UPI) system for shares applied and allotted during an IPO.

The deadline for putting in place automated web portal with respect to Initial Public Offers (IPOs) through UPI system has also been extended.

The extension has been given after stakeholders approached the regulator seeking additional time for implementing the system changes given the prevailing uncertainty due to the COVID pandemic.

The framework for automated web portal would come into force from October 1, 2021 while those related to SMS alerts from January 1, 2022, Sebi said in a circular. Earlier, the framework was to come into force for IPOs opening from May 1, 2021.

With regard to SMS alerts, Sebi said Self Certified Syndicate Bank (SCSB) will have to continue to send SMS alerts during the actual block/debit/unblock of Unified Payment Interface (UPI) mandate in the prescribed format.

The details of total number of shares applied, allotted or non-allotted will be included in SMS for public issues opening from January 1, 2022, the regulator said. For the ease of doing business, Sebi prescribed a web portal to be hosted by sponsor banks for Closed User Group (CUG) entities.

The portal should have details of statistics of mandate blocks/ unblocks, performance of apps and UPI handles, down-time/ network latency (if any) across intermediaries and any such processes having an bearing on the IPO bidding process.

Now, it has been decided that automated web portal will be live and operational after due testing and mock trials with the CUG entities for public issues opening on or after October 1, 2021. The requisite information on this automated portal will be updated periodically in intervals not exceeding two hours.

In the interim, the regulator said that for the public issues opening from Wednesday and till the automated web portal is live and operational, the sponsor banks will send the details of statistics of mandate blocks/ unblocks and other details to the e-mail address of CUG entities periodically in intervals not exceeding three hours.

In case of exceptional events such as technical issues with UPI handles, the same will be intimated immediately to the CUG entities so as to facilitate the flow of information in the public issue process.

The stock exchanges and lead managers will have to facilitate providing the requisite data of CUG entities to sponsor bank for the development of an automated web portal. Such information needs to be provided to the sponsor bank before opening the public issue.

While the process of unblocking needs to be completed by T+4 (T is issue closing date), the regulator has revised the certain timelines regarding the process.

Sebi said the Registrar to the Issue (RTI) will have to provide the allotment or revoke files to the sponsor bank by 8:00 pm on T+3 i.e. the day when the Basis of Allotment (BOA) has to be finalised.

Earlier, sponsor banks were required to execute the online mandate revoke file for non-allottees or partial allottees on the BOA.

Further, Sebi said that sponsor bank will have to execute the online mandate revoke file for non-allottees or partial allottees and provide pending applications for unblock, if any, to the RTI, not later than 5 pm on BOA+1. Earlier, this time period was 12.30 pm.

Subsequent to the receipt of the pending applications for unblock from the sponsor bank, the RTI will have to submit the bank-wise pending UPI applications for unblock to the SCSBs, by 6.30 pm on BOA+1. Earlier, this time period was 2 pm.

To ensure that the unblocking is completed on T+4, the lead managers, on a continuous basis and before the opening of the public issue will take up the matter with the SCSB’s at appropriate level.

In March, Sebi put in place measures to have a uniform policy to further streamline the processing of ASBA (Application Supported by Block Amount) applications through UPI process among intermediaries or SCSBs, and also to provided a mechanism of compensation to investors.