SEBI extends second phase of UPI payment facility for retail investors

Market regulator Securities and Exchange Board of India has decided to continue with phase two of Unified Payments Interface (UPI) payment facility available for retail investors while applying for shares during IPOs.

In November of 2018, SEBI had said that it would launch UPI as an alternative payment option, that will cut listing time for an IPO to three days from six, for retail investors to buy shares in a public issue in a phased manner from January 1, 2019.

In November last year, the timeline for implementation of Phase II of UPI with ASBA was stretched till March 31, 2020.

SEBI's fresh circular to continue with the second phase of UPI with ASBA comes after representations in this regard were made by various stakeholders amid prevailing uncertainty due to the COVID-19 pandemic.

"It has been stated that the systems and processes for achieving Phase III timelines of T+3 need to be further deliberated and finalized in light of the experience gained during one of the major IPOs that opened and closed in the first week of March 2020," it added.

The market regulator had extended the implementation date of the second phase till 30 June 2019.

In June, SEBI in a circular had said that for applications by retail individual investors through intermediaries, the existing process of, investor submitting a bid-cum-application form with any intermediary along with bank account details, will be discontinued.

UPI was made mandatory for retail investors who want to bid for shares in an IPO through the Application Supported by Blocked Amount or ASBA mode.