SEBI cuts rights issue allotment timeframe to 15 days
Published on Thu, Aug 20, 2009 at 12:54 | Source : CNBC-TV18
Updated at Thu, Aug 20, 2009 at 20:55
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SEBI cuts rights issue allotment timeframe to 15 days
The Securities and Exchange Board of India (SEBI) has said Application Supported by Blocked Amount, or ASBA, would be applicable to all rights issue, reports CNBC-TV18. Currently, it is applicable in initial public offering (IPOs).
The Securities and Exchange Board of India (SEBI) has said that companies can utilise rights issue proceeds only after allotment. SEBI has notified cut in rights issue allotment timeframe to 15 days while it has notified rationalisation of rights issue disclosure norms too.
The regulator has also said that Application Supported by Blocked Amount, or ASBA, would be applicable to all rights issue, reports CNBC-TV18. Currently, it is applicable in initial public offering (IPOs).
According to the Bombay Stock Exchange website, the objective of introducing ASBA is to ensure that the investor's funds leave his bank account only upon allocation of shares in public issues. The ASBA process also ensures that only the requisite amount of funds is debited to the investor's bank account on allotment of shares. In this mechanism, the need for refunds is completely obviated.
