Sebi Mandates UPI For Public Debt Securities Applications Starting 1 Nov
The introduction of UPI is expected to make the process more efficient, ensuring smoother transactions and quicker fund blocking for retail investors
The Securities and Exchange Board of India (SEBI) has introduced a mandate requiring individual investors applying for public issues of debt securities for amounts up to Rs 5 lakh to use Unified Payments Interface (UPI) to block funds, starting from 1 November 2024. This move aims to streamline the application process and bring it in line with procedures for equity public issues.
In its circular issued on Tuesday, Sebi stated that investors applying through intermediaries such as syndicate members, stock brokers, registrars, and depository participants will now be required to use UPI for blocking funds. However, investors will still have the option to apply via other existing methods, such as Self-Certified Syndicate Banks (SCSBs) or stock exchange platforms.
This mandate applies to public issues of debt securities, non-convertible redeemable preference shares, municipal debt securities, and securitised debt instruments.
"All individual investors applying in public issues of such securities through intermediaries where the application amount is up to ₹5 lakh shall only use UPI for blocking of funds," Sebi stated, adding that investors must provide their bank account-linked UPI ID in the bid-cum-application form.
Last week, Sebi amended rules to accelerate the process for public issuances of debt securities, allowing faster access to funds for issuers. The changes included reducing the period for public comments on draft offer documents from seven working days to one day for already listed issuers, and from seven to five days for other issuers.
Additionally, Sebi reduced the minimum subscription period for public debt issues from three working days to two, and in cases of revisions to the price band or yield, issuers can now extend the bidding period by just one working day instead of three.
The introduction of UPI is expected to make the process more efficient, ensuring smoother transactions and quicker fund blocking for retail investors.
