CDS and Clearing Ltd (CDSC) has finalised all the preparatory works to implement the Centralised Applications Supported by Blocked Amount (C-ASBA) system mandatorily while applying for primary shares. Since the Securities Board of Nepal (SEBON) has approved the guidelines, CDSC has planned to implement the new provision within the next few days.
According to Dev Prakash Gupta, chief executive officer of CDSC, the new system is complementary to the existing ASBA system while issuing initial public offerings (IPO) of any company, which has got approval from SEBON. “This is not a totally new system. The C-ASBA is more user friendly than the earlier one while issuing public offerings of any company,” he informed.
After the new system is fully implemented, anyone who is interested to apply or view the result of the IPO will be able to do so through the online system. “Once a customer has been registered in the system, he or she will not have to go to the issue manager or the bank to apply for IPO,” Gupta informed. “Customers will get a registration number, which will be synchronised with their bank account and beneficial ownership account and this will allow them to apply for shares through online system.”
After people apply for the shares, the necessary amount will be blocked in the customer’s bank account until the shares are allotted.
Likewise, after introduction of this system, issue manager will be able to allot the shares the very next day after the IPO issuance is closed to the general public. “In this system, the details of investors are already uploaded. So, this helps to allot the shares within a short period of time,” Gupta stated.
Currently, the C-ASBA system is being implemented by 25 banks and financial institutions. After enforcement of the guidelines, all the financial institutions will be registered at the C-ASBA system.
Source: The Himalayan Times