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SEBI extends UPI-based investments to debt securities

The Securities and Exchange Board of India (SEBI) will now allow investors to make UPI payments to purchase public issues of debt securities, it said in a circular on Monday. From January 1, 2021, investors can block funds up to ₹2 lakhs through the Applications Supported by Blocked Amount (ASBA) facility. Back in November 2018, SEBI had issued a circular requiring the use of UPI for public issues of equity shares through the use of the ASBA facility. Traditionally, investors would use a paper-based application to invest in public issues of equity or debt. But through ASBA they can block funds in their bank account, which only gets deducted once the shares (and now debt securities) get allotted. The ASBA facility for investments is routed through UPI 2.0, which is an enhanced version of the real-time payments platform. At present, there are 18 mobile-based UPI apps which allow investors to invest in public issues of equity shares, including apps by banks, PhonePe, and Google Pay. In its circular, SEBI says that investors should be provided with an option to apply for public issues of debit securities through an app or web interface of stock-exchanges in addition to market intermediaries (brokers, registrars or depository participants) permitting the UPI mechanism to allow investors to block funds. Under the UPI ASBA mechanism, SEBI had laid out a three-phase roll-out of the UPI ASBA mechanism, in its 2018 circular, to reduce the time-line issue closure to listing from 6 to 3 working days. Under…

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