SEBI Regulations for Merchant Bankers
Merchant Bankers have been barred from undertaking activities other than related to the securities market. The SEBI (Merchant Bankers) Regulations, 1992 have been amended on December 19, 1997 to provide that:
a. The applicant should be a fit and proper person;
b. A merchant banker has to seek separate registration for its underwriting or portfolio management activities;
c. The categorization of merchant bankers I, II, III and IV has been dispensed with;
d. A merchant banker, other than a bank or a public financial institution, has been prohibited from carrying any activities not pertaining to the securities market; and Read more…
Code of Conduct for Merchant Bankers
1. A Merchant Banker shall make all efforts to protect the interests of investors.
2. A Merchant Banker shall maintain high standards of integrity, dignity and fairness in the conduct of its business.
3. A Merchant Banker shall fulfill its obligations in a prompt, ethical, and professional manner.
4. A Merchant Banker shall at all times exercise due diligence, ensure proper care and exercise
independent professional judgment.
5. A Merchant Banker shall endeavor to ensure that Inquiries from investors are adequately dealt with;
b. Grievances of investors are redressed in a timely and appropriate manner;
c. Where a complaint is not remedied promptly, the investor is advised of any further steps
which may be available to the investor under the regulatory system.
6. A Merchant Banker shall ensure that adequate disclosures are made to the investors in a timely manner in accordance with the applicable regulations and guidelines so as to enable them to make a balanced and informed decision. Read more…
Definition of a Merchant Banker
The merchant bankers are those financial intermediaries involved with the activity of transferring capital funds to those borrowers who are interested in borrowing.
They guarantee the success of issues by underwriting them. Merchant Banks are popularly known as “issuing and accepting houses”. Unlike in the past, their activities are now primarily non-fund based (Fee based). They offer a package of financial services. The basic function of merchant banks is marketing corporate and other securities that are guaranteeing sales and
Distribution of securities and also other activities such as management of customer services, portfolio management, credit syndication, acceptance credit, counseling, insurance, etc.
Merchant Banking in India
Merchant banking activity was formally initiated into the Indian capital Markets when Grindlays bank received the license from reserve bank in 1967. Read more…
