SEBI working on ASBA-like mechanism for secondary market transactions

In an initial public offering (IPO), Application Supported by Blocked Amount (ASBA) mechanism is already there

September 22, 2022 8:49 IST | India Infoline News Service

Madhabi Puri Buch, the chairperson of SEBI, stated on Wednesday that the organization is also developing an ASBA-like tool for secondary market transactions.

In an initial public offering (IPO), the Application Supported by Blocked Amount (ASBA) method helps ensure that money from an investor only moves when an allocation occurs, according to Buch, who spoke at the Global Fintech Fest.

"We are currently working hard to examine facilities similar to ASBA for the secondary market. So why can't that be done for the secondary market if it can be done for the main market?" said Buch.

"Chances are, sooner or later, the regulator will act to destroy your business model if it is such that it is going to enhance concentration risk or structural vulnerability," she said.

The head of SEBI further stated that no business model that depends on a closed system, whose claims or offerings cannot be independently verified or inspected, will be allowed.

Additionally, she stated that as data is a public good or infrastructure, any attempt by a private party to own it or profit from it will be prohibited.

The head of SEBI also discussed the regulator's stance on Algo trading, stating that it is neither in favour of nor opposed to the practice.

According to her, SEBI will increase its spending on technical instruments to improve its surveillance powers. Cybersecurity, according to the Sebi chief, is also crucial and will receive greater attention in the future.

Buch stated that no business should consider implementing anonymity into the system or having anything that does not adhere to the standards of transparency and made it clear that any such ideas would not pass regulatory muster.

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