THE GAZETTE OF INDIA
EXTRAORDINARY
PART –II – SECTION 3 – SUB SECTION (ii)
PUBLISHED BY AUTHORITY
SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 7th September, 2006
SECURITIES AND EXCHANGE BOARD OF INDIA
(BANKERS TO AN ISSUE) (AMENDMENT)
REGULATIONS, 2006
S.O No. 1453 (E). In exercise of the powers conferred by section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following Regulations to further amend the Securities and Exchange Board of India (Bankers to an Issue) Regulations, 1994, namely :-
1. These Regulations may be called the Securities and Exchange Board of India (Bankers to an Issue) (Amendment) Regulations, 2006.
2. They shall come into force on the date of their publication in the Official Gazette.
3. In the Securities and Exchange Board of India (Bankers to an Issue) Regulations, 1994:-
(i) in regulation 2 –
a. after the opening part and before clause (b), the following clauses shall be inserted, namely:-
“(a) “Act” means the Securities and Exchange Board of India Act, 1992 (15 of 1992);
(aa) “banker to an issue” means a scheduled bank carrying on all or any of the following activities, namely:-
(i) acceptance of application and application monies;
(ii) acceptance of allotment or call monies;
(iii) refund of application monies;
(iv) payment of dividend or interest warrants;
(ab) “body corporate” shall have the meaning assigned to it in or under clause (7) of section 2 of the Companies Act, 1956 (1 of 1956);
(ac) “certificate” means a certificate of registration issued by the Board;
(ad) “change of status or constitution” in relation to a banker to an issue -
(i) means any change in its status or constitution of whatsoever nature; and
(ii) without prejudice to generality of sub-clause (i), includes –
(A) amalgamation, demerger, consolidation or any other kind of corporate restructuring falling within the scope of section 391 of the Companies Act, 1956 (1 of 1956) or the corresponding provision of any other law for the time being in force;
(B) change in its managing director or whole-time director; and
(C) any change in control over the body corporate;
(ae) “change in control”, in relation to a banker to an issue being a body corporate, means:-
(i) if its shares are listed on any recognised stock exchange, change in control within the meaning of regulation 12 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997;
(ii) in any other case, change in the controlling interest in the body corporate;
Explanation: For the purpose of sub-clause (ii), the expression “controlling interest” means an interest, whether direct or indirect, to the extent of at least fifty one percent. of voting rights in the body corporate;”
b. after clause (c), the following clause shall be inserted, namely:-
“(ca) “issue” means an offer of sale or purchase of securities by any body corporate or by any other person or group of persons on his or its or their behalf, as the case may be, to or from the public, or the holders of securities of such body corporate or person or group of persons;”
c. clause (e) shall be substituted with the following, namely:-
“(e) “scheduled bank” means a bank included in the Second Schedule of the Reserve Bank of India Act, 1934 (2 of 1934);
d. in clause (f), the words “and the rules” occurring after the words “defined in the Act” and the words “or the rules, as the case may be” occurring at the end shall be omitted.
(ii) in regulation 3, after sub-regulation (1), the following sub-regulation shall be inserted, namely:-
“(1A) An application for registration made under sub-regulation (1) shall be accompanied by a non-refundable application fee as specified in Schedule II.”
(iii) in regulation 8, after sub-regulation (1), the following sub-regulation shall be inserted, namely:-
“(1A) An application for renewal made under sub-regulation (1) shall be accompanied by a non-refundable application fee as specified in Schedule II.”
(iv) after regulation 8, the following regulations shall be inserted, namely:-
“Conditions of registration
8A. (1) Any registration granted under regulation 7 or any renewal granted under regulation 8 shall be subject to the following conditions, namely:-
(a) where the banker to an issue proposes to change its status or constitution, it shall obtain prior approval of the Board for continuing to act as such after the change;
(b) it shall enter into a legally binding agreement with the body corporate for or on whose behalf it is acting as banker to an issue stating therein the allocation of duties and responsibilities between itself and the body corporate for the issue for which it is acting as a banker to an issue;
(c) it shall pay the fees for registration or renewal, as the case may be, in the manner provided in these regulations;
(d) it shall take adequate steps for redressal of grievances of the investors within one month of the date of the receipt of the complaint and keep the Board informed about the number, nature and other particulars of the complaints received and the manner in which such complaints have been redressed;
(e) it shall abide by the regulations made under the Act in respect of the activities carried on by it as banker to an issue.
(2) Nothing contained in clause (a) of sub-regulation (1) shall affect the obligation to obtain a fresh registration under section 12 of the Act in cases where it is applicable.
Period of validity of certificate
8B. The certificate of registration granted under regulation 7 and its renewal granted under regulation 8, shall be valid for a period of three years from the date of its issue.”
(v) in Schedule II –
a. in paragraph 1, for the words “Rupees five lacs”, the words “ten lakh rupees” shall be substituted;
b. in paragraph 2, for the words and figures “Rs. 2.5 lacs”, the words “five lakh rupees” shall be substituted;
c. after paragraph 3, the following paragraph shall be inserted, namely:-
“3A. The non-refundable fee payable along with an application for registration under sub-regulation (1A) of regulation 3 or an application for renewal of registration under sub-regulation (1A) of regulation 8 shall be a sum of twenty five thousand rupees.”
d. in paragraph 4, for the words and figures “paragraphs 1 and 2” the words and figures “paragraphs 1, 2 and 3A” shall be substituted.
F.No. SEBI/LAD/DOP/ 0709 /2006
M. DAMODARAN
CHAIRMAN
SECURITIES AND EXCHANGE BOARD OF INDIA
Footnotes :
1. The principal regulations Securities and Exchange Board of India (Bankers to an Issue) Regulations, 1994 were published in Official Gazette of India on July 14, 1994 vide F.No.SEBI/LE/7/94.
2. The Securities and Exchange Board of India (Bankers to an Issue) Regulations, 1992 was subsequently amended :
(a) on November 28, 1995 by Securities and Exchange Board of India (Payment of Fees) (Amendment) Regulations, 1995 vide No. S.O. 939 (E);
(b) on January 5, 1998 by Securities and Exchange Board of India (Bankers to an Issue) (Amendment) Regulations, 1998 vide No. S.O. 15 (E).
(c) on September 30, 1999 by Securities and Exchange Board of India (Bankers to an Issue) (Amendment) Regulations, 1999 vide No. S.O. 800 (E).
(d) on March 28, 2000 by Securities and Exchange Board of India (Appeal to Securities Appellate Tribunal) (Amendment) Regulations, 2000 vide No. S.O. 278 (E).
(e) on May 29, 2001 by Securities and Exchange Board of India (Investment Advice by Intermediaries) (Amendment) Regulations, 2001 vide No. S.O. 476 (E).
(f) on September 27, 2002 by Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 vide No. S.O. 1045 (E).
(g) on October 1, 2003 by Securities and Exchange Board of India (Bankers to an Issue) (Amendment) Regulations, 2003 vide No. S.O. 1159 (E).
(h) on March 10, 2004 by the Securities and Exchange Board of India (Criteria for Fit and Proper Person) Regulations, 2004 vide S.O. No. 398(E).
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