Introduction of Unified Payments Interface (UPI) mechanism for Real Estate Investment Trusts
- SEBI Circular No. CIR/DDHS/CIR/P/2019/15 dated January 15, 2019 (hereinafter to be referred as ‘ASBA Circular’) lays down the process for payment for applications in public issue of units of Real Estate Investment Trust (REIT) through the facility of ASBA.
- After consultation with stakeholders, it has been decided to provide an additional option to individual investors to apply in public issues of units of REITs with a facility to block funds through Unified Payments Interface (UPI) mechanism for application value up to Rs. 5 Lac.
- The process flow for availing the option of blocking funds through UPI mechanism is placed at Annex I to this Circular.
- New entities / mechanisms part of the public issue process using UPI
4.1.National Payments Corporation of India (NPCI): NPCI, a Reserve Bank of India (RBI) initiative, is an umbrella organization for all retail payments in India. It has been set up with the guidance and support of the Reserve Bank of India (RBI) and Indian Banks Association (IBA).
4.2.Unified Payments Interface (UPI): UPI is an instant payment system developed by the NPCI. It enables merging several banking features, seamless fund routing & merchant payments into one hood. UPI allows instant transfer of money between any two persons’ bank accounts using a payment address which uniquely identifies a person’s bank account.
4.3.Sponsor Bank: Sponsor Bank means a Banker to the Issue registered with SEBI which is appointed by the Issuer to act as a conduit between the Stock Exchanges and NPCI in order to push the mandate collect requests and / or payment instructions of the retail investors into the UPI. - Validation by Stock Exchanges and Depositories
5.1.The details of investor viz. PAN, DP ID/ Client ID, entered on the Stock Exchange platform at the time of bidding, shall be validated by the Stock Exchange/s with the Depositories on real time basis.
5.2.Stock Exchanges and Depositories shall put in place necessary infrastructure for this purpose. - Other requirements
6.1.Stock Exchanges shall update demand data on working days on their websites which shall include all the UPI (accepted/pending) and ASBA bids; ‘Working day’ for this purpose shall be the working day of the Stock Exchange on which units of REIT are proposed to belisted.
6.2.The additional text of data fields required to be included in the Application-and-bidding-form relating to UPI is placed at Annex II to this Circular. The roles of the Issuer, Registrar, Stock exchange, Intermediariesand Collecting Banks is given at Annex IIIof this Circular.
6.3.The details of commission and processing fees payable to each intermediary and the timelines for payment shall be disclosed in the offer document.
6.4.The intermediaries shall provide necessary guidance to their investors to useUPImechanismfor blocking funds while making applications in public issues.
6.5.All entities involved in the process shall co-ordinate with one another to ensure completion of listing of securities and commencement of trading by T+ 6 working day.
6.6.The Merchant Banker shall ensure that the process of additional payment mechanism through UPI is disclosed in the offer document and in all the newspaper where issue advertisement is disclosed.
6.7.All entities involved in the process are advised to take necessary steps to ensure compliance with this circular.
Applicability of this circular - The provisions of this circular shall be applicable to a public issue of units of REIT under the SEBI (Real estate Investment Trusts) Regulations, 2014 which opens on or after August 01, 2022. Stock Exchanges, Depositories, NPCI, Sponsor Banks and Self Certified Syndicate Banks shall make required changes to implement the same from August 01, 2022.
- This circular is issued in exercise of the powers conferred under Regulation 14(24) and 33 of SEBI (Real estate Investment Trusts) Regulations, 2014 and Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors insecurities and to promote the development of, and to regulate the securities markets. This circular is issued with the approval of the competent authority.
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