The security and exchange board of India (SEBI) has approved new guidelines for initial public offer (IPO). According to new rule, the investors have to pay the amount for allotted shares. The investors are exempted to pay 100 percent advance fees. The amount can be retained in bank account till the completion of entire allotment process.

The required amendment has been done in Disclosure and Investor Protection Guidelines, 2000. The payment is required to be done through self-certified syndicate banks (SCSBs). A new circular in this regard was issued on Wednesday. SEBI has introduced a new process called Application Supported by Blocked Amount (ASBA) to make IPO process investor friendly.

The ASBA process will be applicable to all types of book-built IPO. This process will work according to Self Certified Syndicate Banks (SCSB). The banks are also required to enlist themselves in the SCSB list. The list will be available in the website of SEBI. The listed bank will authorized to offer the ASBA facility to all its account holders.

The security and exchange board of India has fulfilled the long pending demand of IPO investors buy approving new laws. The new law is expected to come into effect after recognition of banks as SCSBs.