Capital market regulator Sebi on Tuesday came with a circular to make application supported by blocked amount (Asba) more popular among retail investors. The circular states that syndicate and sub-syndicate members can now procure Asba forms from the investors and submit it to Self Certified Syndicate Banks (SCSBs). This effectively means that investors can now approach brokers directly for the Asba application forms instead of going to banks.
Both brokers and banks will share the responsibility for Asba. Brokers will be required to upload the bid and other relevant details of Asba forms in the bidding platform provided by the stock exchanges and forward the same to the respective SCSBs. SCSBs, on the other hand, will be responsible for actions such as signature verification and blocking of funds.
While brokers will be entitled for selling commission for Asba forms, banks shall be entitled to a processing fee. However, for Asba forms procured directly by banks, they would be entitled for selling commission only.
Lack of enough financial incentives for brokers has been attributed to the low penetration of Asba payment among retail investors. Currently, only designated banks receive commission and not brokers. However, brokers earn commission on the IPO application, if it is made through the traditional non-Asba route.
