NSE has also begun mock trade with banks under the alternative payment arrangement for investors applying for IPOs.

“Applications Supported by Blocked Amount” (ASBA) is to be operationalised shortly after the system is put in place among the exchanges, banks, registrars to issues and merchant bankers.

SEBI recently issued guidelines for ASBA, a process that will block money in investors’ bank accounts pending allotment of shares in an IPO.

ASBA will co-exist with the current process, where the cheque is used as a mode of payment, or the required amount is deducted from the investors’ bank accounts at the time of application.

“More than 10 banks participated in the mock trade conducted by NSE for streamlining the ASBA process which commenced on Monday and will go on till August 14,” said a NSE official.

Under ASBA, retail investors don’t have to allocate money separately for an IPO; the required amount will be blocked at the time of application in their own accounts, to be deducted only on allotment of shares.

“After the mock trade we will be ready to go live whenever SEBI’s directive to start the process is communicated,” the official said.

More Stories on : Forex | Stock Exchanges | Derivatives Markets | Regulatory Bodies & Rulings

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page