SEBI issues Circular titled Additional Payment Mechanism for Payment of Balance Money in Calls for partly paid specified securities issued by the listed entity

SEBI issues Circular titled Additional Payment Mechanism for Payment of Balance Money in Calls for partly paid specified securities issued by the listed entity

This circular shall be applicable for all Call Money Notice wherein the payment period opens on or after January 01, 2021.

SEBI has issued a Circular titled Additional Payment Mechanism for Payment of Balance Money in Calls for partly paid specified securities issued by the listed entity.

SEBI, in its endeavour to protect the investors' interest and reduce investor grievances relating to refund, introduced Application Supported by Blocked Amount (ASBA) as the sole payment mechanism in the IPO and Rights issues.

Considering that payment through the ASBA mechanism is investor friendly and enables faster completion of the process, it has been decided to introduce additional payment mechanism (i.e.ASBA, etc.) for making subscription and/or payment of calls in respect of partly paid specified securities through SCSBs and intermediaries such as Trading Members/ Brokers -having three in one type account and Registrar and Transfer agents (RTA).

Three channels have been provided for the purpose of making payment of balance money for calls in respect of partly paid specified securities.

Channel I is by Online ASBA-Through an online portal of the SCSB. The SCSBs shall send the application to RTA and block funds in the shareholders account.

Channel II is Physical ASBA-Physically at the branch of a SCSB The SCSBs shall send the application to RTA and block funds in the shareholders' account.

Channel III is an Additional Online mode using the facility of linked online trading, demat and bank account (3-in-1 type accounts) provided by some of the brokers.

The payment period for payment of balance money in Calls is to be kept open for fifteen days.

The intermediaries including the issuer company and its RTA shall provide necessary guidance to the specified security holders in use of the ASBA mechanism while making payment of calls.

This circular shall be applicable for all Call Money Notice wherein the payment period opens on or after January 01, 2021.

Stock Exchanges have been directed to take necessary steps to put in place systems for implementation of the circular, including necessary amendments to the relevant by-laws, rules and regulations; take necessary action to institute additional payment channels (electronic banking modes only) for making subscription and/or paying call money in respect of partly paid up specified securities and bring the provisions of this circular to the notice of the listed companies and their members and also disseminate the same on their websites.