Market regulator SEBI has proposed that eligible stock brokers should compulsorily provide the facility of transactions in the stock market to the customers using UPI-based block system on the lines of ASBA facility. ASBA (Application Supported by Blocked Amount) is the application process for IPO which has been developed by SEBI. According to the news of Bhasha, this application is the authority to block the application amount in the bank account of the customer to take the initial public offering (IPO).

Customer will get this facility

According to the news, under the UPI block system, customers can transact in the stock market based on the amount blocked in their bank accounts. This facility is currently optional for investors and it is not necessary for the firm providing trading facility to offer it as a service to the customers. ASBA, the facility of blocking the amount in the account for share allotment, is already available for the primary market. This ensures that the investor’s money is transferred only in case of share allotment.

Three-in-one trading account facility can be available

The Securities and Exchange Board of India (SEBI) has suggested in its consultation paper issued on Wednesday that eligible stock brokers should provide the facility of share trading for their customers using the UPI block system in the cash segment. SEBI has also said that stock brokers can provide three-in-one trading account facility as an alternative to making a facility like ASBA mandatory. In such accounts, customers will have money in their bank account, which will give them interest on the remaining cash amount. Apart from this, the three-in-one facility will be available for both cash and derivative segments without any amount restriction, while the facility of trading using the UPI block system will be available only for the cash segment at present.

Comments sought on proposals till September 12
The market regulator has sought public comments on these proposals by September 12. Trading members are classified as eligible stock brokers (QSBs) based on the size and scale of their operations. Being designated as a QSB increases the responsibilities and obligations of stock brokers. The regulator had released the beta version of trading through block mechanism for share trading on January 1 this year. However, it was implemented only on the cash segment. At present, this facility is optional for investors and is not mandatory for trading members to provide it as a service to clients.