UPI Requirements for Debt Securities: SEBI's Latest Directive
SEBI's Directive on UPI for Debt Securities Applications
The Securities and Exchange Board of India (SEBI) has issued a directive mandating the use of Unified Payments Interface (UPI) for individual investors applying for public issues of debt securities. This rule, effective from November 1, applies to applications of up to ₹5 lakh made through intermediaries.
Streamlining the Application Process
The move is aimed at streamlining the application process, aligning it with that of equity shares and convertibles. SEBI clarified that individual investors applying through intermediaries, such as registered stock brokers, syndicate members, registrar to an issue and transfer agent, or depository participants, must use UPI for fund blocking.
Requirements for Investors
- Investors are required to provide their bank account-linked UPI ID in the bid-cum-application form.
- This form must be submitted with intermediaries.
Broader Efforts to Streamline Public Issuances
The UPI mandate is part of SEBI's broader effort to streamline the public issuance process for debt securities. Recently, the regulator amended rules to expedite access to funds for issuers.
- The period for seeking public comments on draft offer documents has been reduced from seven working days to one day for issuers with already listed specified securities.
- For other issuers, the comment period is now five days.
- Furthermore, SEBI has shortened the minimum subscription period from three working days to two.
In instances of revision in the price band or yield, the bidding period disclosed in offer documents can be extended by one working day instead of three.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.