Investors must use UPI to block funds for buying debt securities up to ₹5 lakh: Sebi

Capital markets regulator Securities and Exchange Board of India (Sebi) has directed that all individual investors applying for public issues of debt securities through intermediaries for amounts up to ₹5 lakh should only use UPI for blocking the required funds.

The investors should provide a bank account-linked UPI ID in the bid-cum-application form submitted with intermediaries, reads the Sebi circular.

However, individual investors will continue to have the choice of availing other modes (through SCSBs and the stock exchange platform) to apply for a public issue.

According to the regulator, the circular has been issued to protect the interests of investors in securities and to promote and regulate the country's securities market.

The provisions of the circular will be applicable to public issues of debt securities, non-convertible redeemable preference shares, municipal debt securities and securitised debt instruments opening on or after November 1, 2024.

Signed by Rishi Barua, Deputy General Manager at Department of Debt and Hybrid Securities, the Sebi circular dated September 24, 2024, was issued in exercise of the powers conferred under section 11(1) of the Sebi Act, 1992.

Performance evaluation

Sebi has also issued a circular to determine parameters for the performance evaluation of market infrastructure institutions.

Accordingly, the regulator has put in place a rating framework to ensure consistency in the manner of assessment and outcomes across market infrastructure institutions (MIIs).

"In order to ensure consistency in the manner of assessment and outcomes across similar MIIs, compare performance of such MIIs and monitor trends over time, a rating framework has been developed which would be assigned after evaluation of the MIIs. The rating would reflect the Independent External Agency’s judgment on the performance of the MII in respect of expected outcomes,” reads the circular.

The independent external agency will be appointed with prior No Objection Certificate (NOC) from Sebi and on such terms and conditions, including fees and timelines approved by the MII governing board.