SEBI Rules for IPO: Application supported by blocked amount is used in India for initial public offering or follow-on public offering. In which the amount is deducted from the bank account of the investor only when the shares are allotted to him.
Many people cheat investors in the stock market. But now the Security Exchange Board of India has come up with a new rule for the investors. After the implementation of which money will be deducted from investors’ accounts only when investors buy shares. Broker’s commission will also not be charged before the share transaction is done. For example, the service of ASBA is taken advantage of in IPOs. Similarly, now ASBA will be implemented in the stock markets as well. After which the fraud in the stock market will be curbed.
What is ASBA?
Application Supported by Blocked Amount (ASBA) is used in India for initial public offering or follow-on public offering. In which the amount is deducted from the bank account of the investor only when the shares are allotted to him. In this rule, the amount of the first investor is blocked. Which is deducted after every transaction. Now the same rule is going to be implemented in Savvy stock market as well. SEBI will implement this rule from 1 January 2024.
Security Exchange Board of India i.e. SEBI said that through ASBA i.e. Application
Supported by Blocked Amount, people investing in the stock market can be protected from fraud. After the implementation of ASBA, the money is deducted only until the process of buying and selling of shares is completed. It remains in the hands of the investors that the amount they want to block outright, they will get the facility to deduct from the account several times. The amount of share investors is first sent to the clearing corporation. Where the amount can be withdrawn only on the purchase and sale of shares. This facility can be availed on the basis of UPI.
Investors will have options
Your money is blocked under ASBA. Which is deducted from your account only when the share transaction is done. But it completely depends on the investors and brokers whether they want to avail this facility or not. But investors who have multiple broking accounts can use non-UPI facility for some accounts and UPI facility for other accounts if they so desire. After implementing this new rule of SEBI, the fraud in the stock market can be reduced to a great extent.
