After the huge success of the ASBA (Application Supported by Blocked Amount) payment system for IPOs, SEBI plans to replicate it forbuying and selling of stocks in the secondary market. At a fintech summit in Mumbai on Wednesday,SEBI Chairperson Madhabi Puri Buch said the regulator was working on a system sans structural vulnerabilities.

When retail investors bid for IPOs, the application money remains blocked in their own bank accounts. It is deducted when the shares are allotted. SEBI is considering a similar system for the secondary market.

On algo trading

Buch said that certain principles should be followed in the markets for the sake of more transparency. “If algos claim they can deliver 350 per cent return, they must be open for SEBI validation. It cannot be a black box.We are not for or against algo trading as long as there is sufficient transparency and disclosures. Claims that cannot be audited and validated will not be permitted,” she said.

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