SEBI Streamlines IPO Process and Redressal of Investor Grievances

SEBI issued a Circular dated March 16, 2021 on streamlining the process of initial public offer (‘IPOs’) with Unified Payment Interface (‘UPI’) in application supported by blocked amount and redressal of investor grievances. Under the new norms, lead managers and self-certified syndicate banks (‘SCSBs’) are required to compensate IPO applicants for lapses by paying Rs 100 (approx. US$ 1.3) per day or 15% per annum interest of application amount (whichever is higher) for specified defaults. Further, lead managers are required to ensure that the payment of processing fee or sellings commission to the intermediaries be released only after ascertaining that there are no pending complaints pertaining to block/ unblock of UPI bids, receiving the confirmation on completion of unblocks from sponsor banks or SCSBs. Additionally, to ensure timely information to investors, SCSBs are required to send SMS alerts to mandate block and unblock of UPI bids, containing the details as set out in the Circular. The Circular will come into force for IPOs opening on and after May 1, 2021.

Published In:Inter Alia - Quarterly Edition - March 2021 [ English Chinese japanese ]
Date: March 31, 2021