ASBA | IAS GYAN

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Context:

Markets regulator Sebi is looking to come out with Application Supported by Blocked Amount (ASBA)-like structure for the secondary market.

Details:

ASBA is an application containing an authorisation to block the application money in the bank account, for subscribing to an initial public offering (IPO).
If an investor is applying through ASBA, their application money will be debited from the bank account only if the application is selected for allotment after the basis of allotment is finalised, or the issue is withdrawn or failed.
In an IPO, the ASBA system helps ensure that money from an investor gets moved only when an allotment happens.
There is likely to be a regulatory gap when there is something new and innovative that happens in the market. It is up to the regulator to keep pace with that.