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SEBI Guidelines of Merchant Banks :

SEBI Guidelines of Merchant Banks Presented by Nisha.N

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GUIDELINES FOR MERCHANT BANKERS : SEBI’s authorization is a must to act as merchant bankers.Authorisation criteria include Professional qualification in finace,law or business management Infrastructure like office space,equipment and man power Capital adequacy Past track of record,experience,general reputation and fairness in all transactions Every merchant banker should maintain copies of balance sheet,Profit and loss account,statement of financial position Half-yearly unaudited result should be submitted to SEBI Merchant bankers are prohibited from buying securities based on the unpublished price sensitive information of their clients

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SEBI has been vested with the power to suspend or cancel the authorisation in case of violation of the guidelines Every merchant banker shall appoint a ‘Compliance Officer‘ to monitor compliance of the Act SEBI has the right to send inspecting authority to inspect books of accounts,records etc… of merchant bankers Inspections will be conducted by SEBI to ensure that provisions of the regulations are properly complied An initial authorisation fee,an annual fee and renewal fee may be collected by SEBI A lead manager holding a certificate under category I shall accept a minimum underwriting obligation of 5% of size of issue or Rs.25 lakhs whichever is less

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SOME PROBLEMS OF MERCHANT BANKERS SEBI stipulates high capital adequacy norms for authorisation which prevents young,specialised professionals into merchant banking business Non co-operation of the issuing companies in timely allotment of securities and refund of application of money etc.. is another problem Yet merchant banking is vast but should develop adequate expertise to provide a full range of merchant banking services.



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