Secondary Market ASBA Pilot In Dec
Date
10/24/2023 2:02:19 PM
(MENAFN- Live Mint) "The stock market regulator plans to run a pilot for an ASBA-like facility in the secondary market in December, under which money will be transferred only after the actual share transfer. Till then, the funds remain in the investor's bank account, and continue to earn interest, which stands for Application Supported by Blocked Amount, is currently available only for share purchases in the primary market facility will be provided by integrating the Unified Payments Interface (UPI) service of 'single-block-and-multiple-debits' with the secondary market trading and settlement process. Under this service, customers can use the single block feature in UPI to block specific amounts in their bank accounts for specific payments.“National Payments Corp. of India (NPCI) is ready with the 'single-block-and-multiple-debits' functionality in UPI. The pilot is expected to see participation from most top banks,” an official aware of the matter said on condition of anonymity helps safeguard investors' money from being lost to default by brokers or clearing members. Funds under ASBA will be accessible only to the clearing corporation that handles the settlement of stock transactions. The system gives investors more control, minim-izing broker-investor disputes. In its December monetary policy, Reserve Bank of India said it had decided to introduce the functionality of 'single-block-and-multiple debits' in UPI.“This would be helpful for hotel bookings, purchase of securities in the secondary capital market as also purchase of government securities using the RBI's Retail Direct scheme, e-commerce transactions, etc.,” the regulator stated. Then in January, a consultation paper by the Securities and Exchange Board of India proposed introducing a facility to block funds for trading in secondary markets. The regulator sought comments from public till 16 February on the proposal; and, in March, it approved the UPI-enabled fund-blocking facility for secondary market trading. In June, Sebi said the new facility will take effect in January 2024. NPCI handles 10 million approved autopay mandates monthly and more than half of initial public offer applications are processed using the block feature of UPI.
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