(MERCHANT BANKERS) REGULATIONS, 1992 CONTENTS 1. Short title and commencement CHAPTER II: REGISTRATION OF MERCHANT BANKERS 3. Application for grant of certificate CHAPTER III: GENERAL OBLIGATIONS AND RESPONSIBILITIES 13. Code of Conduct CHAPTER IV: PROCEDURE FOR INSPECTION 29. Board's right to inspect CHAPTER V: PROCEDURE FOR ACTION IN CASE OF DEFAULT 35. Liability for action in case of default FORM A: APPLICATION FOR GRANT OF CERTIFICATE / RENEWAL OF CERTIFICATE SCHEDULE III: CODE OF CONDUCT FOR MERCHANT BANKERS EXTRAORDINARY PART III - SECTION 4 PUBLISHED BY AUTHORITY NOTIFICATION THE 22 ND DAY OF DECEMBER, 1992 BOMBAY SECURITIES AND EXCHANGE BOARD OF INDIA (MERCHANT BANKERS) REGULATIONS, 1992 No.LE/11112/92. In exercise of the powers conferred by Section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board with the previous approval of the Central Government hereby makes the following regulations, namely: - PRELIMINARY (2) They shall come into force on the date of their publication in the Official Gazette. 2. In these regulations, unless the context otherwise requires, - (c) "inspecting authority" means one or more persons appointed by the Board to exercise powers conferred under Chapter IV; (d) "principal officer " means – (ii) partner, in the case of a partnership firm; (iii) director, in the case of a body corporate, who is responsible for the activities of the merchant banker; (f) Words and expressions used and not defined in these regulations but defined in the Act and the rules shall have the meanings respectively assigned to them in the Act or the rules as the case may be. 1. Following clause (a) of regulation 2 was deleted by the Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 published in the Official Gazette of India dated 27.09.2002 REGISTRATION OF MERCHANT BANKERS Application for grant of certificate (2) The application under sub- regulation (1) shall be made for any one of the following categories of the merchant banker namely:- (ii) to act as adviser, consultant, manager, underwriter, portfolio manager. (c) Category III, that is to act as underwriter, adviser, consultant to an issue; (d) Category IV, that is to act only as adviser or consultant to an issue. (ii) an applicant can carry on the activity as underwriter only if he obtains separate certificate of registration under the provisions of Securities and Exchange Board of India (Underwriters) Regulations, 1993, and (iii) an applicant can carry on the activity as portfolio manager only if he obtains separate certificate of registration under the provisions of Securities and Exchange Board of India (Portfolio Manager) Regulations, 1993.] Provided that, before rejecting any such application, the applicant shall be given an opportunity to remove within the time specified such objections as may be indicated by the Board. (2) The applicant or its principal officer shall, if so required, appear before the Board for personal representation. 4*[Provided that the merchant banker who has been granted registration by the Reserve Bank of India to act as a Primary or Satellite dealer may carry on such activity subject to the condition that it shall not accept or hold public deposit] 5*[(aa)] the applicant has the necessary infrastructure like adequate office space, equipments, and manpower to effectively discharge his activities;] (b) the applicant has in his employment minimum of two persons who have the experience to conduct the business of the merchant banker; (c) a person directly or indirectly connected with the applicant has not been granted registration by the Board; Explanation: For the purposes of this clause the expression "directly or indirectly connected" means any person being an associate, subsidiary, inter-connected or group Company of the applicant in case of the applicant being a body corporate. (d) the applicant fulfils the capital adequacy requirement specified in regulation 7; (e) the applicant, his partner, director or principal officer is not involved in any litigation connected with the securities market which has an adverse bearing on the business of the applicant; (f) the applicant, his director, partner or principal officer has not at any time been convicted for any offence involving moral turpitude or has been found guilty of any economic offence; (g) the applicant has the professional qualification from an institution recognised by the Government in finance, law or business management; 6*(gg) the applicant is a fit and proper person,] (h) grant of certificate to the applicant is in the interest of investors. (2) For the purposes of sub- regulation (1), the networth shall be as follows, namely: - Category Minimum Amount Category I 7*[Rs. 5, 00, 00, 000] Category II Rs. 50, 00, 000 Category III Rs. 20, 00, 000 Category IV Nil Explanation: For the purposes of this regulation "networth" means in the case of an applicant which is a partnership firm or a body corporate, the value of the capital contributed to the business of such firm or the paid up capital of such body corporate plus free reserves as the case may be at the time of making application under sub-regulation (1) of regulation 3. 10*[******] 12*[******] (2) The application for renewal, under sub-regulation (1) shall be dealt with in the same manner as if it were a fresh application for grant of a certificate. 13*[Provided that in case of an application for renewal of certificate of registration, the provisions of clause (a) of regulation 6 shall not be applicable upto June 30th, 1998] (3) The Board on being satisfied that the applicant is eligible for renewal of certificate shall grant a certificate in Form B and send intimation to the applicant 14*[***] 15*[***] 16*[***] (6) On the grant of a certificate the applicant shall be liable to pay the fees 17*[***] in accordance with Schedule II; 18*[***] (2) The refusal to grant registration shall be communicated by the Board within thirty days of such refusal to the applicant stating therein the grounds on which the application has been rejected. (3) Any applicant may, being aggrieved by the decision of the Board, under sub-regulation (1), apply within a period of thirty days from the date of receipt of such intimation to the Board for reconsideration of its decision. (4) The Board shall reconsider an application made under sub- regulation (3) and communicate its decision as soon as possible in writing to the applicant. (2) Where a merchant banker fails to pay the Annual fees as provided in sub-regulation (1), read with Schedule II, the Board may suspend the registration certificate, whereupon the merchant banker shall cease to carry on any activity as a merchant banker for the period during which the suspension subsists. Foot notes 3. Clause (a) to regulation 6 was inserted by SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette of India dated 09.12.1997. 4. Proviso to clause (a) to regulation 6 was inserted by SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette of India dated 17.11.1999. 5. Clause (a) to regulation 6 was renumbered as (aa) by SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette dated 09.12.1997. 6. Clause (gg) to regulation 6 was inserted by SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette of India dated 09.12.1997. 7. The figure "1, 00, 00, 000" in sub-regulation (2) of regulation 7 was Substituted by SEBI (Merchant Bankers) (Amendment) Regulations, 1995 published in the Official Gazette of India dated 07.09.1995. 8. The following part of sub-regulation (1) of regulation 8 was omitted by SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official of India Gazette dated 09.12.1997 "and send an intimation to the applicant mentioning the category for which the Board has granted certificate" 9. Sub-regulation (2) of regulation 8 was omitted by SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette of India dated 09.12.1997. 10. Sub-regulation (3) of regulation 8 was omitted by SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette of India dated 09.12.1997. 11. The following part of sub-regulation (4) of regulation 8 was omitted by SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette of India dated 09.12.1997 "for the category for which the registration is granted" 12. Following proviso to sub-regulation (4) of regulation 8 was omitted by SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette of India dated 09.12.1997 "Provided that the amount of fees payable shall be proportionately reduced by the amount of fees already paid by the merchant banker for the year in which the registration is granted in the higher category." 13. Proviso to sub-regulation (2) of regulation 9 was inserted by SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette of India dated 21.01.1998. 14. Following part of sub-regulation (3) of regulation 9 was omitted by SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette of India dated 09.12.1997 "mentioning the category for which the Board has granted certificate" 15. Following sub-regulation (4) of regulation 9 was omitted by SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette of India dated 09.12.1997 "Notwithstanding anything contained in sub-regulation (1), where a certificate has been granted for a category lower than for what has been applied for, the applicant, may make an application to the Board at any time after the expiry of one year from the date of grant of such registration." 16. Following sub-regulation (5) of regulation 9 was omitted by the SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette of India dated 09.12.1997 "An application made under sub-regulation (4) shall be considered in the same manner as an application made under regulation 3." 17. Following part of sub-regulation (6) of regulation 9 was omitted by SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette of India dated 09.12.1997 "for the category for which the registration is granted" 18. Following proviso to sub-regulation (6) of regulation 9 was omitted by SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette of India dated 09.12.1997 "Provided that the amount of fees payable shall be proportionately reduced by the amount of fees already paid by the merchant banker for the year in which the registration is granted in the higher category." GENERAL OBLIGATIONS AND RESPONSIBILITIES Notwithstanding anything contained above, a merchant banker who prior to the date of notification of the securities and exchange board of India (Merchant Bankers) Amendment Regulations, 1997, has entered into a contract in respect of a business other than that of the securities market, may, if he so desires, discharge his obligations under such contract. Explanation - for the purposes of this regulation: (ii) A "public financial institution" shall have the same meaning as assigned to the term under Section 4A of the Companies Act, 1956 (1 of 1956) and shall include Industrial Development Corporations and Financial Corporations established by the Central Government or State Governments as the case may be] (b) a copy of profit and loss account for that period; (c) a copy of the auditor's report on the accounts for that period; and (d) a statement of financial position. (3) Without prejudice to sub- regulation (1), every merchant banker shall, after the end of each accounting period furnish to the Board copies of the balance sheet, profit and loss account and such other documents for any other preceding five accounting years when required by the Board. Provided that, in an issue of offer of rights to the existing members with or without the right of renunciation the amount of the issue of the body corporate does not exceed rupees fifty lakhs, the appointment of a lead merchant banker shall not be essential. (2) Every lead merchant banker shall before taking up the assignment relating to an issue, enter into an agreement with such body corporate setting out their mutual rights, liabilities and obligations relating to such issue and in particular to disclosures, allotment and refund. (a) Less than rupees fifty crores Two Provided that, where there are more than one lead merchant bankers to the issue the responsibilities of each of such lead merchant banker shall clearly be demarcated and a statement specifying such responsibilities shall be furnished to the Board at least one month before the opening of the issue for subscription. (2) No lead merchant banker shall, agree to manage the issue made by any body corporate, if such body corporate is an associate of the lead merchant banker. Provided that, if the lead merchant banker is unable to accept the minimum underwriting obligation, that lead merchant banker shall make arrangement for having the issue underwritten to that extent by a merchant banker associated with the issue and shall keep the Board informed of such arrangement. (ii) draft prospectus or where there is an offer to the existing shareholders, the draft letter of offer; (iii) any other literature intended to be circulated to the investors, including the shareholders; and (iv) such other documents relating to prospectus or letter of offer as the case may be. (3) The lead manager shall ensure that the modifications and suggestions, if any, made by the Board on the draft prospectus or the Letter of Offer as the case may be, with respect to information to be given to the investors are incorporated therein. Provided that where a person other than the lead manager is entrusted with the refund or allotment of securities in respect of any issue, the lead manager shall continue to be responsible for ensuring that such other person discharges the requisite responsibilities in accordance with the provisions of the Companies Act and the listing agreement entered into by the body corporate with the stock- exchange. (i) his responsibilities with regard to the management of the issue; (ii) any change in the information or particulars previously furnished, which have a bearing on the certificate granted to it; (iii) the names of the body corporate whose issues he has managed or has been associated with; (iv) the particulars relating to breach of the capital adequacy requirement as specified in regulation 7; (v) relating to his activities as a manager, underwriter, consultant or adviser to an issue as the case may be. 28A. (1) Every merchant banker shall appoint a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines, instructions etc., issued by the Board or the Central Government and for redressal of investors’ grievances. (2) The compliance officer shall immediately and independently report to the Board any non-compliance observed by him and ensure that the observations made or deficiencies pointed out by the Board on \ in the draft prospectus or the Letter of offer as the case may be, do not recur.]
Foot notes 20. Substituted for the words "Financial Institution" by SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette of India dated 06.06.1996. 21. "after June 30th, 1998" inserted by SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette of India dated 06.06.1996. 22. Proviso to regulation 13A was inserted by SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette of India dated 17.11.1999. 23. Regulation 24A inserted by SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette of India dated 06.06.1996. 24. Regulation 28A was inserted by SEBI (Investment advice by intermediaries) (Amendment) Regulations, 2001 published in the Official Gazette of India dated 29.05.2001.
PROCEDURE FOR INSPECTION (2) The purposes referred to in sub-regulation (1) may be as follows namely: - (b) that the provisions of the Act, rules, regulations are being complied with; (c) to investigate into the complaints received from investors, other merchant bankers or any other person on any matter having a bearing on the activities of the merchant banker; and (d) to investigate suo-moto in the interest of securities business or investors interest into the affairs of the merchant banker. (2) Notwithstanding anything contained in sub-regulation (1), where the Board is satisfied that in the interest of the investors no such notice should be given, it may by an order in writing direct that the inspection of the affairs of the merchant banker be taken up without such notice. (3) During the course of inspection, the merchant banker against whom an inspection is being carried out shall be bound to discharge his obligations as provided under regulation 31. (2) The merchant banker shall allow the inspecting authority to have reasonable access to the premises occupied by such merchant banker or by any other person on his behalf and also extend reasonable facility for examining any books, records, documents and computer data in the possession of the merchant banker or any such other person and also provide copies of documents or other materials which, in the opinion of the inspecting authority are relevant for the purposes of the inspection. (3) The inspecting authority, in the course of inspection, shall be entitled to examine or record statements of any principal officer, director, partner, proprietor and employee of the merchant banker. (4) It shall be the duty of every director, proprietor, partner, officer or employee of the merchant banker to give to the inspecting authority all assistance in connection with the inspection which the merchant banker may reasonably be expected to give. Provided that the auditor so appointed shall have the same powers of the inspecting authority as are mentioned in regulation 29 and the obligations of the merchant banker in regulation 31 shall be applicable to the investigation under this regulation. Explanation: For the purposes of this regulation the expression "qualified auditor" shall have the same meaning as given in Section 226 of the Companies Act, 1956 (1 of 1956). Communication of findings etc. to the merchant banker (2) On receipt of the explanation if any, from the merchant banker, the Board may call upon the merchant banker to take such measures as the Board may deem fit in the interest of the securities market and for due compliance with the provisions of the Act, rules and regulations. PROCEDURE FOR ACTION IN CASE OF DEFAULT 26*[Liability for action in case of default 35. A merchant banker who – (b) contravenes any of the provisions of the Act, rules or regulations, shall be dealt with in the manner provided under the Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002." 27*[******] 35. (1) A merchant banker who – (b) contravenes any of the provisions of the Act, rules or regulations; shall be liable to any of the penalties specified in sub-regulation (2). (b) cancellation of registration. Suspension of registration (ii) the merchant banker – (b) furnishes wrong or false information; (c) does not submit periodical returns as required by the Board; (d) does not co-operate in any enquiry conducted by the Board; (iv) the merchant banker indulges in manipulating or price rigging or cornering activities; (v) the merchant banker is guilty of misconduct or improper or unbusinesslike or unprofessional conduct which is not in accordance with the Code of Conduct specified in Schedule III; (vi) the merchant banker fails to maintain the capital adequacy requirement in accordance with the provisions of regulation 7; (vii) the merchant banker fails to pay the fees; (viii) the merchant banker violates the conditions of registration; (ix) the merchant banker does not carry out his obligations as specified in the regulation. (ii) the financial position of the merchant banker deteriorates to such an extent that the Board is of the opinion that his continuance as merchant banker is not in the interest of investors; (iii) the merchant banker is guilty of fraud, or is convicted of a criminal offence; (iv) in case of repeated defaults of the nature mentioned in regulation 36 provided that the Board furnishes reasons for cancellation in writing. 39. (2) The enquiry officer shall issue to the merchant banker a notice the registered office or the principal place of business of the merchant banker. (3) The merchant banker may, within thirty days from the date of receipt of such notice, furnish to the enquiry officer a reply together with copies of documentary or other evidence relied on by him or sought by the Board from the merchant banker. (4) The enquiry officer shall, give a reasonable opportunity of hearing to the merchant banker to enable him to make submissions in support of his reply made under sub-regulation (3). (5) Before the enquiry officer, the merchant banker may either appear in person or through any person duly authorised by the merchant banker: Provided that no lawyer or advocate shall be permitted to represent the merchant banker at the enquiry: Provided further that where a lawyer or an advocate has been appointed by the Board as a presenting officer under sub- regulation (6), it shall be lawful for the merchant banker to present its case through a lawyer or advocate. (6) If it is considered necessary, the enquiry officer may ask the Board to appoint a presenting officer to present its case. (7) The enquiry officer shall, after taking into account all relevant facts and submissions made by the merchant banker, submit a report to the Board and recommend the penalty to be imposed as also the grounds on the basis of which the proposed penalty is justified. (2) The merchant banker shall within twenty-one days of the date of the receipt of the show- cause send a reply to the Board. (3) The Board after considering the reply to the show-cause notice, if received, shall as soon as possible but not later than thirty days from the receipt of the reply, if any, pass such order as it deems fit. (4) Every order passed under sub- regulation (3) shall be self- contained and give reasons for the conclusions stated therein including justification of the penalty imposed by that order. (5) The Board shall send a copy of the order under sub- regulation (3) to the merchant banker. (2) On and from the date of cancellation the merchant banker shall with immediate effect cease to carry on any activity as a merchant banker. a. Substituted for the following provision by SEBI (Appeal to the Securities Appellate Tribunal) (Amendment) Regulations, 2000 published in the official Gazette of India dated 28.03.2000 "Any person aggrieved by an order of the Board may prefer an appeal to the Central Government"
FORM A SECURITIES AND EXCHANGE BOARD OF INDIA (MERCHANT BANKERS) REGULATIONS, 1992 (REGULATION 3) APPLICATION FOR GRANT OF CERTIFICATE / ADDITIONAL INFORMATION FOR FRESH REGISTRATION
NAME OF APPLICANT CATEGORY: CONTACT NAME ______________________ TELEPHONE NO: _____________________ INSTRUCTIONS FOR FILLING UP FORM 1. It is important that this application form should be filled in accordance with the regulations. 2. Applicants must submit a completed application form together with appropriate supporting documents to the Board. 3. Application for registration will be considered provided it is complete in all respects. 4. Answers must be typed. 5.All signatures must be original. 6.Information which needs to be supplied in more details may be given on separate sheets which should be attached to the application form. 1. PARTICULARS OF THE APPLICANT 1.1 Name of the Applicant: 1.2 (A) Address - Principal Place of business / Registered Office of the Company. Pin code: ______________________ Telephone No:________________ Telex No:______________________Fax No:______________________ (B) Address for Correspondence: Pin code:______________________Telephone No:________________ Telex No:______________________Fax No:______________________ (C) Address of Branch Offices: 2. ORGANISATION STRUCTURE (Organisation Chart separately showing functional responsibilities of Merchant Banking activities to be enclosed). 2.1 Objectives:- (To be given in brief along with copy of Memorandum and Articles of Association). 2.2 Date and Place of Incorporation: Day Month Year Place 2.3 Status of the Applicant: (e.g. limited company - Private/Public, unlimited company, partnership, proprietary, others. If listed, names of Stock Exchanges and latest share price to be given). 2.4 Particulars of all Directors/Partners/Proprietors:- Name Qualification Experience in Merchant Banking & Share in applicants firm company Directorship in other companies 2.5 Particulars of Key Management Personnel: (Particulars of merchant banking division) Name Qualification Experience with particular reference to merchant banking Date of appointment Functional areas 2.6 Name and activities of associate companies/concerns Name of Company Address/firm Type of activity handled Nature of Interest of Promoter/Director Nature and interest of applicant company 3. BUSINESS INFORMATION 3.1 History, major events and present activities: 3.2 Details of Experience in Merchant Banking activities. 3.3 Experience in other financial services rendered:- 3.4 Business handled during the last three years: a) Issue Management Name of client Type of Issue Size of Issue Year of Issue Times subscribed Name of lead merchant banker Functional responsibilities b) Investment Adviser: - Name of Client Year for which services are rendered Nature of services rendered c) Underwriting Name of client Type and size Amount underwritten of Issue % age of issue under Year of Issue Whether there was any devolvement written d) Portfolio Management Name of Scheme Features of the Scheme Number of Clients Total Volume of Funds managed Average Returns e) Consultants/Advisors to the Issue Name of the Client Year of Issue Type and Size of Issue Nature of services rendered Name of Lead Merchant Banker(s) 4. CLIENT INFORMATION 4.1 List of major clients with address Name Services Rendered 4.2 If the applicant is proposing to engage in Merchant Banking activities for the first time, the experience of key management personnel to be indicated. Name of Key management personnel Qualification Previous positions held Experience particularly in respect of merchant banking activities 4.2 (a) If the applicant is proposing to engage in Merchant Banking activities for the first time, business plan of the company with projected volume of activities and income for which registration is sought to be specifically given. 4.3 Details of infrastructure including computing facilities, equity research and database available with the applicant. 4.4 Any other information considered relevant to the nature of services rendered by the applicant. 5. FINANCIAL INFORMATION 5.1 Capital Structure (Rs. in lakhs)
Note: - 1. In case of partnership or proprietary concerns, please indicate capital minus drawings. 2. In case of partnership or proprietary concerns, please indicate the financial position, means and networth of the partners. 5.2 Deployment of Resources (Rs. in lakhs)
(Details of Investments, Loans & Advances made to Associate Companies/ firms where Promoters/ Directors have an interest be separately given). 5.3 Major Sources of Income: (Rs. in lakhs)
*As fees charged by the merchant banker may vary from issue to issue, please indicate range within which fees have been charged. 5.4 Net Profit
5. 5 Dividend
Amount Percentage Note: Please enclose three years of audited annual accounts. Where unaudited reports are submitted, give reasons. If minimum networth requirement has been met after last audited annual accounts, audited statement of accounts of a later date also be submitted. 5.6 List of major shareholders (holding 5% and above of applicant directly or along with associates - applicable only to limited companies) Shareholding as on: ______________________________ Name of shareholder No. of Shares held % age of total paid up capital of the company 5.7 Name and Address of the Principal bankers of the applicant. 5.8 Name and address of the Auditors. 6. OTHER INFORMATION 6.1 Details of all settled and pending disputes: Nature of dispute Name of the party Pending/settled. 6.2 Indictment of involvement in any economic offences by the applicant or any of the Directors, or key managerial Personnel in the last three years. DECLARATION
I/We hereby apply for registration. I/We warrant that I/We have truthfully and fully answered the questions above and provided all the information which might reasonably be considered relevant for the purposes of my registration. I/We declare that the information supplied in the application form is complete and correct. For and on behalf of ------------------------------------------ (Name of Applicant) Director/Partner or Sole Proprietor Director/Partner ___________________ (Name in Block Letters) (Name in Block Letters) _______________________ Date
FORM B (REGULATION 8 CERTIFICATE OF REGISTRATION In exercise of the powers conferred by sub-section (1) of section 12 of the Securities and Exchange Board of India Act, 1992, read with the rules and regulations made thereunder the Board hereby grants a certificate of registration to ______________________________ as a merchant banker in Category I 28*[***] subject to the conditions in the rules and in accordance with the regulations to carry out the following activities: - 1. Management of any issue, including preparation of prospectus, gathering information relating to the Issue, determining financing structure, tie up of financiers, final allotment and refund of excess application money. 2. Investment Advisor. 29*[******] 5. Managers, Consultant or Adviser to any issue including corporate advisory services. 6. Consultant or Advisor. (*Delete whichever are not applicable) II. Registration Code for the merchant banker is MB / / / III. This certificate shall be valid from _____________ to _________ and may be renewed as specified in regulation 9 of Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992. Place By Order Sd/- For and on behalf of Securities and Exchange Board of India
FORM C (REGULATION 23) To, Dear Sirs, SUB: ISSUE OF ____________________ BY _______________________ LTD. We, the undernoted Lead Manager(s) to the above mentioned forthcoming issue state as follows: 1. We have while finalising the draft prospectus/letter of offer pertaining to the said issue have examined various documents and other material as for adequate disclosures to the investor; 2. On the basis of such examination and the discussions with the company, its directors and other officers, other agencies, independent verification of the statements concerning objects of the issue the contents of the documents and other material furnished by the company, WE CONFIRM that: (a) the draft prospectus/letter of offer forwarded to SEBI is in conformity with the documents, materials and papers relevant to the issue; (b) all the legal requirements connected with the said issue have been duly complied with; and (c) the disclosures made in the draft prospectus/letter of offer are true, fair and adequate to enable the investors to make a well informed decision as to the investment in the proposed issue. PLACE: LEAD MANAGER (S) TO THE ISSUE N. B. A list of documents and materials examined may be forwarded along with this certificate. Foot notes 28. The figures "II/III/IV" after the word "Category I" and before the words "subject to the conditions" in paragraph 1 in Form A of Schedule I were deleted by SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette of India dated 06.06.1996. 29. The words "3. Underwriting of Issue" and "4. Portfolio Manager Service" after the words "1. Investment Adviser" in paragraph 1 in Form B of Schedule I were deleted by the SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette of India dated 06.06.1996.
SCHEDULE II (REGULATION 12) FEES 30*1. Every merchant banker shall pay a sum of Rupees five lacs as registration fees at the time of the grant of certificate by the Board. 2. A merchant banker to keep registration in force shall pay renewal fee of Rs 2. 5 lacs every three years from the fourth year from the date of initial registration. 3. (a) The fee referred to in PARAGRAPH 1 shall be paid by the merchant banker within fifteen days from the date of receipt of the intimation from the Board under sub-regulation (1) of regulation 8 (b) The fee referred to in paragraph 2 shall be paid by the merchant banker within fifteen days from the date of receipt of intimation from the Board under sub-regulation (3) of regulation 9. 4. The fees specified in paragraphs1 and 2 shall be payable by merchant banker by a demand draft in favour of ‘Securities and Exchange Board of India’ payable at Mumbai or at the respective regional office."] Foot notes 30. Following paragraphs 1, 2, 3 and 4 were substituted by SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette of India dated 30.09.1999. "1. Every Merchant bankers shall subject to paragraphs 3 and 4 of this Schedule pay registration fees as set out below: (a) Category I merchant banker. A sum of Rs 2.5 lakhs to be paid annually for the first two years commencing from the date of initial registration and thereafter for the third year a sum of Rs 1 lakh to keep his registration in force; (b) Category II Merchant banker A sum of Rs 1.5 lakhs to be paid annually for the first two years commencing from the date of initial registration and thereafter for the third year a sum of Rs 50,000 to keep his registration in force; (c) Category III Merchant bankers A sum of Rs 1 lakh to be paid annually for the first two years commencing from the date of initial registration and thereafter for the third year a sum of Rs 25,000 to keep his registration in force; (d) Category IV Merchant bankers A sum of Rs 5,000/- to be paid annually for the first two years commencing from the date of initial registration and thereafter for the third year a sum of Rs 1000/- to keep his registration in force. (2) Renewal fees to be paid by the Merchant banker. (a) Category I merchant bankers A sum of Rs 1 lakh to be paid annually for the first two years commencing from the date of each renewal and thereafter for the third year a sum of Rs 20,000 to keep his registration in force; (b) Category II Merchant bankers A sum of Rs 75,000/- to be paid annually for the first two years commencing from the date of each renewal and thereafter for the third year a sum of Rs 10,000 to keep his registration in force; (c) Category III Merchant bankers A sum of Rs 50,000/- to be paid annually for the first two years commencing from the date of each renewal and thereafter for the third year a sum of Rs 5,000 to keep his registration in force; (d) Category IV Merchant bankers A sum of Rs 5,000/- to be paid annually for the first two years commencing from the date of each renewal and thereafter for the third year a sum of Rs 2, 500 to keep his registration in force; a*(3) The fees specified in paragraphs 1 and 2 above shall be paid in the following manner namely: - (a) First installment is to be paid within 15 days from the date of intimation from the Board under regulation 8. (b) Subsequent installments including the renewal fee to be paid on or before expiry of 12 months of each year of registration beginning from date of grant of such registration. a. Following para 3 was substituted The Fees specified in paragraphs 1 and 2 above, shall be payable by draft in favour of "Securities and Exchange Board of India " at Bombay or at the respective regional office. The above para 3 originally read as follows which was substituted by SEBI (Payment of Fees) Amendment Regulations, 1995 by notification no S.O. 939 (E) dated 28.11.95. The Fees specified in paragraphs 1 and 2 above, shall be payable by a cheque or draft in favour of "Securities and Exchange Board of India " at Bombay or at the respective regional office.
31*[Schedule III Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992 [Regulation 13] CODE OF CONDUCT FOR MERCHANT BANKERS
(b) In the event of an employee of the Merchant Banker rendering such advice, the merchant banker shall ensure that such employee shall also disclose the interests, if any, of himself, his dependent family members and the employer merchant banker, including their long or short position in the said security, while rendering such advice. 31. Following Schedule III was substituted by SEBI (Merchant Banker) (Amendment) Regulations, 2003 published in the Official Gazette of India dated 01.10.2003. SECURITIES AND EXCHANGE BOARD OF INDIA (MERCHANT BANKERS) REGULATIONS, 1992 CODE OF CONDUCT FOR MERCHANT BANKERS (REGULATION 13) 1. A merchant banker in the conduct of his business shall observe high standards of integrity and fairness in all his dealings with his clients and other merchant bankers. 2. A merchant banker shall render at all times high standards of service, exercise due diligence, ensure proper care and exercise independent professional judgement. He shall wherever necessary, disclose to the clients, possible sources of conflict of duties and interests, while providing unbiased services. 3. A merchant banker shall not make any statement or become privy to any act, practice or unfair competition, which is likely to be harmful to the interests of other merchant bankers or is likely to place such other merchant bankers in a disadvantageous position in relation to the merchant banker, while competing for or executing any assignment. 4. A merchant banker shall not make any exaggerated statement, whether oral or written, to the client either about the qualification or the capability to render certain services or his achievements in regard to services rendered to other clients. 5. A merchant banker shall always endeavour to - a. render the best possible advice to the clients having regard to the clients' needs and the environments and his own professional skill; and b. ensure that all professional dealings are effected in a prompt, efficient and cost effective manner. 6.A merchant banker shall not - a. divulge to other clients, press or any other party any confidential information about his client, which has come to his knowledge; and b. deal in securities of any client company without making disclosure to the Board as required under the regulations and also to the Board of Directors of the client company. 7.A merchant banker shall endeavour to ensure that - a. the investors are provided with true and adequate information without making any misguiding or exaggerated claims and are made aware of attendant risks before any investment decision is taken by them; b. copies of prospectus, memorandum and related literature are made to the investors; c. adequate steps are taken for fair allotment of securities and refund of application money without delay; and d. complaints from investors are adequately dealt with. 8.The merchant bankers shall not generally and particularly in respect of issue of any securities be party to - a. creation of false market; b. price rigging or manipulation; c. passing of price sensitive information to brokers, members of the stock exchanges and other players in the capital market or take any other action which is unethical or unfair to the investors. a*[8A (a) A merchant banker or any of his employees shall not render, directly or indirectly, any investment advice about any security in the publicly accessible media, whether real-time or non-real-time, unless a disclosure of his interest including long or short position in the said security has been made, while rendering such advice. (b) In case, an employee of the merchant banker is rendering such advice, he shall also disclose the interest of his dependent family members and the employer including their long or short position in the said security, while rendering such advice.] 9. A merchant banker shall abide by the provisions of the Act, rules and regulations and which may be applicable and relevant to the activities carried on by the merchant banker. a. Paragraph 8A in Schedule III was inserted by SEBI (Investment advice by Intermediaries) (Amendment) Regulations, 2001 published in the Official Gazette of India dated 29.05.2001. 32*[SCHEDULE IV (SEE REGULAITON 24A) 1. Every merchant banker shall pay fees as set out below: Size of the issue including premium and intended retention of over subscription (Rs.) Proposed Fee per document (Rs.) Upto 5 crores 10, 000 More than 5 crores and upto 10 crores 15, 000 More than 10 crores and upto 50 crores 25, 000 More than 50 crores and upto 100 crores 50, 000 More than 100 crores and upto 500 crores 2, 50, 000 More than 500 crores 5, 00, 000 2. Fees referred to in clause (1) above, shall be paid in the following manner: a. The fees shall be paid along with the draft of the offer document submitted to the Board under regulation 24 b. The fees shall be payable by a draft in favour of `Securities and Exchange Board of India' at Mumbai or at the respective regional offices where the draft offer document under regulation 24 is submitted. Foot notes 32. Schedule IV was inserted by SEBI (Merchant Bankers) (Amendment) Regulations, 1996 published in the Official Gazette of India dated 06.06.1996. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||