Securities and Exchange Board of India(SEBI) chairman U.K. Sinha announced measures to revamp the capital market by wider participation of retail investors in the Initial Public Offering (IPO) and mutual fund industry, including steps to improve the geographical reach of mutual funds and introducing electronic-IPO. SEBI allows cash transactions in mutual funds up to Rs. 20,000 to help enhance the reach of mutual fund products among small investors, who may not be tax payers and may not have PAN or bank accounts. This move will benefit farmers, small traders/businessmen and workers.
Electronic-IPO is introduced to attract more investors. Applications Supported by Blocked Amount(ASBA) is available with this mode. To facilitate this SEBI allows a nation wide network of brokers of stock exchanges at more than 1,000 locations in addition to the existing channels, for distributing IPOs in electronic form.
Note:
What is ASBA?
ASBA is a facility in which applicants are allowed to apply in IPOs with the money in their accounts which will remain blocked until the issue gets completed. If he gets allotment the money will be transferred for IPO otherwise the money will be released.
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