Second Phase of UPI implementation for retail investors extended till March 2020

Market regulator Securities and Exchange Board of India (Sebi) extended the timeline for the second phase implementation of the Unified Payments Interface (UPI) facility for retail investors applying for shares in public issues. It is extended from 1st July, 2019 to March 2020.

In November, Sebi announced that it will launch UPI as an alternative payment option for retail investors to buy shares in a public issue from 1st January, 2019 in a phased manner. It was a move made to reduce the listing time for an IPO to three days from six. 

The change in the decision was done after consulting with various intermediaries and National Payments Corporation of India (NPCI). Initially,to ensure smooth transition to UPI in Application Supported by Block Amount (ASBA), implementation date was extended till June 30, 2019. Under the recent decision, the timeline for implementation of Phase II is extended till March 31, 2020. In Phase II, Sebi said that for applications by retail individual investors through intermediaries, the process of physical movement of forms from intermediaries to Self-Certified Syndicate Banks (SCSBs) for blocking of funds was discontinued. Only the UPI mechanism with existing timeline of T+6 days was mandated, for a period of three months or floating of five main board public issues, whichever is later. Since then, two big public issues have used the facility of UPI 2, wherein it was seen that the platform has become increasingly acceptable given the number of applications received in ASBA with UPI as a payment mechanism.

Presently, 47 and 5 self-certified syndicate banks are eligible to act as issuer banks and sponsor banks in UPI, respectively.

Leave Comments