Explanation:

In the context of financial reporting, merchant bankers are required to submit unaudited financial results on a quarterly basis as per Regulation 15 when mandated by SEBI (Securities and Exchange Board of India). This ensures more frequent and timely monitoring of their capital adequacy and financial health.

Explanation:

The merchant banking industry during earlier days was mainly driven by the issue management activity. Later on several of the banks engaged in merchant banking activity diversified to offer a broader spectrum of capital market services.

Explanation:

No issuer can undertake a public issue or rights issue of specified securities unless it has entered into an agreement with a Depository for the dematerialization of specified securities, ensuring the transition from physical to electronic form. Depositories facilitate the holding and transfer of securities in dematerialized (electronic) form, promoting efficiency and transparency in the securities market.

Explanation:

When trading and settlement is done through the stock exchanges, the buyers and sellers may not be in touch with each other. The transaction is carried out through SEBI-registered stock brokers or sub-brokers.

Explanation:

The Compliance officer can independently report to SEBI without any approval from management.

Explanation:

These regulations are specifically designed to govern the process of delisting of equity shares from stock exchanges. They outline the procedures and requirements that companies need to follow when they decide to delist their shares from the stock exchanges. This includes procedures for making a delisting offer, obtaining approval from shareholders and stock exchanges, and ensuring fairness and transparency throughout the delisting process. Therefore, option d) is the appropriate regulation applicable to the delisting of equity shares.

Explanation:

The lead merchant banker is required to submit the following documents to SEBI: – Statement certifying that all changes, suggestions and observations made by SEBI have been incorporated in the offer document; – Due diligence certificate at the time of registering the prospectus with the Registrar of Companies; – Copy of the resolution passed by the board of directors of the issuer for allotting specified securities to promoters towards amount received against promoters’ contribution, before opening of the issue – Certificate from a Chartered Accountant, before opening of the issue, certifying that promoters’ contribution has been received in accordance with these regulations, accompanying therewith the names and addresses of the promoters who have contributed to the promoters’ contribution and the amount paid by each of them towards such contribution; – Due diligence certificate as per the prescribed format immediately before the opening of the issue, certifying that necessary corrective action, if any, has been taken; – Due diligence certificate as per format provided in the Regulation after the issue has opened but before it closes for subscription.

Explanation:

Only if the person is a Principal or is over 50 years of age or has 10 years of experience than the certificate can be obtained by any of the three options mentioned above. Otherwise he/she has to pass the NISM exam to get the certificate for the first time.

Explanation:

Every merchant banker shall, after the end of each accounting period furnish to SEBI copies of the balance sheet, profit and loss account and such other documents for any other preceding five accounting years when required by SEBI. The above documents need to be maintained for a minimum period of 5 years.

Explanation:

A Merchant Banker performs activities related Initial Public Offer (IPO), Further Public Offer (FPO), Open Offer, Buy-Back, Delisting etc. It does not provide custodial services. Custodial services are offered by SEBI registered Custodians.

Explanation:

“Takeover” is the acquisition of substantial shares or voting rights for the purpose of seeking management control of the company. Takeover can be by merger of a solvent acquirer with a sick company for availing the tax benefits, or else it can be acquisition of shares through direct negotiations with one who owns controlling interest or through open offer or market purchase of requisite voting rights to change the management of the company.

Explanation:

The duration of the offer for sale through the stock exchange mechanism must adhere to the trading hours of the secondary market and should not extend beyond one trading day.

Explanation:

Explanation:

According to SEBI (Prohibition of Insider Trading) Regulations, an insider includes any person who is connected or deemed to have been connected with the company, any person reasonably expected to have access to unpublished price-sensitive information, and any person who has received or had access to such information. All these categories fall under the definition of an insider, emphasizing the broad scope of individuals covered by insider trading regulations.

Explanation:

FPO can be made through a book building process or a fixed price issue.

Explanation:

The SEBI ICDR (Issue of Capital and Disclosure Requirements) Regulations indeed lay out the general obligations for issuers and other intermediaries involved in the process of issue management. These regulations provide a framework for ensuring transparency, disclosure, and compliance in capital market transactions.

Explanation:

The consideration payable under the Open Offer on the first Rs. 500 crore is an amount equal to 25% of the consideration. On the balance consideration – An additional amount equal to 10% of the balance consideration.

Explanation:

If a broker fails to furnish required information to a recognized stock exchange within the specified time, they may face a penalty of Rs. 1 lakh for each day the failure continues or Rs. 1 crore, whichever is less. This penalty is stipulated as per the regulatory framework to encourage timely and accurate reporting by brokers to the stock exchange.

Explanation:

In order to properly monitor the capital adequacy and the financial health of the merchant banker, regulation 15 has mandated merchant bankers to submit the unaudited half-yearly financial results when required by SEBI.

Explanation:

According to Section 15HA of the SEBI Act, any person engaged in fraudulent and unfair trade practices relating to securities may be subject to a penalty of Rs. 25 crore or three times the amount of profits derived from such practices, whichever is higher. This provision aims to deter and penalize activities that undermine the integrity of the securities market.

Explanation:

The issuer while filing a draft offer document with the recognized stock exchange where the specified securities are proposed to be listed, submits the Permanent Account Number (PAN), bank account number, and passport number of its promoters to such stock exchange.

Explanation:

An announcement regarding the closure of the issue should be made only after the lead merchant banker is satisfied that at least 90% of the offer through the offer document has been subscribed and a certificate regarding that has been obtained from the registrar to the issue.

Explanation:

SEBI (Prohibition of Insider Trading) Regulations, Regulation 5 deals with Trading Plans which can be formulated by an insider and the procedure related. It states that – An insider shall be entitled to formulate a trading plan and present it to the compliance officer for approval and public disclosure pursuant to which trades may be carried out on his behalf in accordance with such plan. Such trading plan shall not entail commencement of trading on behalf of the insider earlier than six months from the public disclosure of the plan.

Explanation:

The issuer company appoints the legal counsel in consultation with the Merchant Banker.

Explanation:

An amalgamation is a combination of two or more companies into a new entity. Amalgamation is distinct from a merger / aquisition because neither company involved survives as a legal entity. Instead, a completely new entity is formed to house the combined assets and liabilities of both companies.

Explanation:

Put Options give the seller the right, but not the obligation, to sell a given quantity of the underlying asset at a given price on or before a given date.

Explanation:

Applications may be rejected, among other reasons, if:
-Application is incomplete
-Information such as PAN number, and bank account is not provided
-Supporting documents such as those required for corporate applicants absent
-The bid is at a cut-off price for an applicant other than a retail individual investor -Terms of offer in terms of minimum application are not met
-Applications from minors
-Multiple applications

Explanation:

For a company intending to issue securities through the ‘Fast Track Issue’ process, it is required to have complied with the listing agreement for a minimum of 3 years immediately preceding the reference date. This criterion ensures that the company has a track record of adherence to listing regulations, contributing to the credibility and reliability of the public issue.

Explanation:

The Department of Investment and Public Asset Management (DIPAM) handles all matters related to the disinvestment of the Government of India’s shareholding in Central Public Sector Enterprises, not the Department of Economic Affairs. DIPAM is specifically tasked with managing disinvestment and strategic sales.

Explanation:

Institutional Placement Programme means the Offer of shares to QIBs for the purpose of achieving minimum public shareholding requirements as required under Rule 19 (2)(b) of SCRR, terms of Chapter VIII-A of SEBI ICDR Regulations. The offer can be by way of issue of shares by the listed company or by way of sale of shares by shareholders of the company.

Explanation:

According to the regulations, a merchant banker is required to take appropriate steps to address investor grievances within one month from the date of receiving the complaint. Additionally, the merchant banker is obligated to keep SEBI informed about the number, nature, and other particulars of the complaints received. This timeframe ensures a timely and efficient resolution of investor grievances.

Explanation:

A shareholder who has not exercised an option in his acceptance shall be deemed to have opted for receiving the offer price in cash. In case of revision in offer price the mode of payment of consideration may be altered subject to the condition that the component of the offer price to be paid in cash prior to such revision is not reduced.

Explanation:

Agreement with an event management company for road shows is not mandatory to come out with with a public issue.

Explanation:

The shareholders may make an application in the application form or who have not received the application form, on a plain paper along with the requisite application money. Where the shareholder makes an application on both the application form and the plain paper, the application is liable to be rejected.

Explanation:

A financial institution, scheduled bank, foreign portfolio investor other than Category III foreign portfolio investor and Mutual Fund shall not be deemed to be a promoter merely by virtue of the fact that 20% or more of the equity share capital of the issuer is held by such person

Explanation:

When the public fails to respond/subscribe to an issue, Underwriters have to chip in and get the issue subscribed.

Explanation:

As per SEBI ICDR Regulations – Retail individual investors or retail individual shareholders or employees entitled for reservation made under regulation 33 may be offered specified securities at a price not lower than by more than ten percent of the price at which net offer is made to other categories of applicants, excluding anchor investors.

Explanation:

The debt market consists of Bond markets, which provide financing through the issuance of debentures and bonds, and enable the subsequent trading thereof. These instruments can be traded in OTC or exchange-traded markets.

Explanation:

As per Regulation 40 of the SEBI ICDR Regulations – The issue shall be underwritten by the lead manager(s) and syndicate member(s): Provided that at least 75% percent of the net offer proposed to be compulsorily allotted to qualified institutional buyers (QIB) for the purpose of compliance of the eligibility conditions, shall not be underwritten.

Explanation:

The Merchant Banker has to ensure that the dispatch of refund orders, allotment letters, and share certificates is done by way of registered post or certificate of posting, whichever is applicable.

Explanation:

Explanation:

A person other than a Principal, who has attained 50 years of age or who has 10 years of experience, may obtain the certificate by any of the following methods:
(a) Passing the relevant certificate examination, as may be specified by NISM.
(b) Completing a related CPE Program, as may be specified by NISM.

Explanation:

All three categories—Mutual funds registered with SEBI, Insurance funds set up and managed by the army, navy, or air force of the Union of India, and State industrial development corporations—are considered Qualified Institutional Buyers (QIBs) for the purpose of participating in a public issue. These entities are recognized as institutional investors with the financial capability to engage in the capital market.

Explanation:

To be eligible for a public issue, if a company has changed its name within the last one year, it is required that at least 50% of its revenue for the preceding one full year has been earned from the activity indicated by the new name. This criterion ensures alignment between the company’s recent name change and its core business activities.

Explanation:

The lead merchant banker shall submit the following to SEBI along with the draft offer document:
1. a certificate, confirming that an agreement has been entered into between the issuer and the lead merchant bankers as per the format specified in Schedule II of SEBI ICDR
2. Due diligence certificate as per the format prescribed in the SEBI ICDR Regulation
3. Due diligence certificate from the debenture trustee in case of an issue of convertible debt instruments as per the prescribed format provided in the Regulations.
4. Certificate confirming compliance of the conditions which are specified in PART C of Schedule VIII of the Regulations.

Explanation:

Mergers, amalgamations, de-mergers, acquisitions of business units or divisions, are all governed by The Companies Act 1956. Any acquisitions of shares or control in listed Indian companies are governed by the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011.

Explanation:

In the case of a further public offer or a rights issue the issuer shall obtain in-principle approval from:

a) All recognised stock exchanges where the specified securities are listed;

b) From all exchanges on which the securities are proposed to be listed, in cases where the specified securities are not listed on any recognized stock exchanges having nationwide terminals;

c) All recognised stock exchanges having nationwide terminals, in case the securities are traded on recognised stock exchanges, with nationwide terminals as well as those which are not having nationwide terminals.

Explanation:

The lead merchant banker along with the issuer shall ensure that the contents of offer documents hosted on the websites as required in the Regulation is same as that of the printed copies filed with the RoC, SEBI and the stock exchanges.

Explanation:

Its within fifteen days.

Explanation:

As per the SEBI ICDR Regulation, a financial institution, scheduled commercial bank, foreign portfolio investor other than Category III foreign portfolio investor, mutual fund, venture capital fund, alternative investment fund, foreign venture capital investor, insurance company registered with the Insurance Regulatory and Development Authority of India or any other category as specified by SEBI from time to time, shall not be deemed to be a promoter merely by virtue of the fact that twenty percent or more of the equity share capital of the issuer is held by such person unless such person satisfy other requirements prescribed under these regulations.

Explanation:

Consideration payable under the Open Offer : – On the first Rs. 500 crore : Amount equal to 25% of the consideration – On the balance consideration : Additional amount equal to 10% of the balance consideration

Explanation:

As per SEBI ICDR Regulations Restriction on Transferability (Lock-in) of Promoter; Contribution: In a public issue, the specified securities held by promoters shall be locked in for the period as given below: Minimum promoters’ contribution shall be locked-in for a period of three years from the date of commencement of commercial production or date of allotment in the public issue, whichever is later.

Explanation:

As per the Regulation 136 of the SEBI ICDR Regulations: If the issuer makes a public issue through the book building process, a) the issue shall be underwritten by lead manager(s) and syndicate member(s): Provided that at least seventy-five percent of the net offer proposed to be compulsorily allotted to qualified institutional buyers for the purpose of compliance of the eligibility conditions specified in sub-regulation (2) of regulation 6, cannot be underwritten. This means that only if 75% of the issue is compulsorily allotted to QIB investors, the issue need not be underwritten.

Explanation:

The issue of debt securities is regulated by:
(1) SEBI (Issue and Listing of Debt Securities) Regulations, 2008 (as amended)
(2) Various circulars issued by SEBI in this regard
(3) Companies Act, 2013 and Rules framed thereunder
(4) Listing Agreement for Debt Securities with Stock Exchanges
(5) RBI Rules and Regulations and
(6) SCRA and SCRR

Explanation:

Prohibition of payment of incentives: As per the SEBI ICDR Regulations, no person connected with the issue shall offer any incentive, whether direct or indirect, in any manner, whether in cash or kind or services or otherwise to any person for making an application for allotment of specified securities. However, this does not apply to fees or commission for services rendered in relation to the issue.

Explanation:

As per the listing agreement with stock exchanges, the correct minimum paid-up capital requirement for the issuer is Rs 10 crore.

Explanation:

A “Retail individual Investor” is defined as an investor who applies or bids for securities with a value not exceeding Rs. 2 lakh.

Explanation:

An announcement regarding the closure of issue can be made only after the lead merchant banker is satisfied that atleast 90% of the offer through the offer document have been subscribed and a certificate regarding that have been obtained from the registrar to the issue.

Explanation:

During the due diligence process, the Lead Manager and the issuer are assisted by external parties such as legal counsels, statutory auditors and specialised industry experts, if required.

Explanation:

The issuer shall announce the floor price or price band at least five working days before the opening of the bid in case of IPO.

Explanation:

According to Rule 19(3) of the Securities Contracts (Regulation) Rules, 1957 (SCRR), a company applying for listing must undertake the following conditions:

1. Letters of allotment should be issued simultaneously.

2. Letters of right should be issued simultaneously.

3. Letters of allotment, acceptance, or rights should be serially numbered and printed on good quality paper.

4. Letters of allotment and letters of right should state how the next payment of interest or dividend on the securities will be calculated.

Explanation:

Explanation:

The Competition Commission Act, 2002 aims at prohibiting anti-competitive agreements, addressing the abuse of dominant positions by enterprises, and regulating combinations (acquisition, acquiring control, and M&A) that may cause or likely to cause an appreciable adverse effect on competition within India. The act establishes the Competition Commission of India (CCI) to enforce these provisions and promote fair competition in the market.

Explanation:

In a merger, functions relating to

(i) Preparation and circulation of information memoranda,

(ii) Deal structuring and negotiations,

(iii) Valuation and due diligence are taken care of by the merchant banker.

Explanation:

Activities Covered under Merchant Banking
a) Managing the public issue of securities
b) Underwriting the public issue
c) Managing/advising on international debt/equity offerings like GDRs, ADRs, FCCBs etc.
d) Private placement of securities
e) Primary/satellite dealership of government securities
f) Corporate advisory services such as mergers, takeovers, buybacks etc.
g) Stock broking
h) Advisory services for projects
i) Syndication of domestic loan offerings
j) International financial advisory services

Explanation:

The SEBI (Merchant Banking) Regulations, 1992 provides for the Registration, General obligations and Responsibilities a Merchant Banker.

Explanation:

The issuer may decide the amount of minimum subscription which it seeks to raise by issue of debt securities and disclose the same in the offer document. The minimum subscription as stipulated by SEBI is 75% of the base issue size for both NBFCs and Non-NBFCs issuers. Further, if the issuer does not receive minimum subscription of its base issue size (75%), then the entire application monies shall be refunded within stipulated period from the date of the closure of the issue.

Explanation:

When one company takes over another and clearly establishes itself as the new owner, the purchase is called an acquisition or a majority acquisition.

Explanation:

Fees payable by the issuer to SEBI with respect to every draft offer document of a public issue are : Issue Size Less than or equal to Rs. 10 crore – A flat charge of Rs. 1,00,000 Issue Size More than Rs. 10 crore but less than or equal to Rs. 5000 crore – 0.1% of the issue size Issue Size More than Rs. 5000 crore – Five Crore Rupees Plus 0.025 percent of the portion of the Issue Size in excess of Rs. 5,000 crore

Explanation:

Stock Brokers and/ or Merchant bankers holding a valid registration certificate under SEBI Act are entitled to act as an underwriter without obtaining a separate certificate as per the SEBI (Underwriters) Regulation and will be governed by these regulations in other respects.

Explanation:

Issuers are allowed to retain over-subscription money upto a maximum of 100% of the base issue price.

Explanation:

The minimum subscription as stipulated by SEBI for Debt securities it is 75% and for Equity shares its 90%.

Explanation:

FPO can be made through a book building process or a fixed price issue. FPO may be also made through the Fast Track Issue (FTI) process, provided certain conditions as prescribed under the SEBI ICDR Regulations are complied with.

Explanation:

A merchant banker who has been granted a certificate of registration, to keep its registration in force, shall pay a fee of nine lakh rupees every three years from the sixth year

Explanation:

A call option gives the buyer the right, but not the obligation, to buy a specified quantity of the underlying asset at a predetermined price on or before a designated future date. This provides the buyer with the flexibility to exercise the option if it becomes financially advantageous while not obligating them to do so.

Explanation:

Where there are more than one lead merchant banker to the issue the responsibilities of each of such lead merchant bankers shall clearly be demarcated and a statement specifying such responsibilities shall be furnished to SEBI at least one month before the opening of the issue for subscription.

Explanation:

The merchant banker is required to ensure that all the information in the offer document, including particulars from the audited financial statements, is not more than 6 months old from the issue opening date. This ensures that investors receive relatively current and relevant information when making investment decisions.

Explanation:

Please note it 21 days for equity shares and 7 days for debt securities.

Explanation:

Regarding “Mode of Payment” when securities of the acquirer company are offered in lieu of cash payment, the value of such securities shall be determined in the specified manner, as duly certified by an independent merchant banker (other than the manager to the offer) or an independent chartered accountant having a minimum experience of ten years.

Explanation:

SEBI (Buy-back of Securities) Regulations is applicable to buy-back of shares or other specified securities of a company listed on a stock exchange. As per the regulation, a company shall buy-back its shares or other specified securities provided that no offer of buy-back for fifteen percent or more of the paid up capital and free reserves of the company shall be made from the open market.

Explanation:

The Draft Prospectus or the Draft Shelf Prospectus, as applicable, contains the disclosures as required by the SEBI Debt Regulations and the Companies Act and has to be filed with the Stock Exchanges. This document is available to the public for comments for a period of seven days.

Explanation:

The promoters of the company shall acquire delisted equity shares from the public shareholders by paying them the value determined by the valuer within three months of the date of delisting from the recognised stock exchange

Explanation:

Preferential issue means an issue of specified securities by a listed issuer to any select person or group of persons on a private placement basis and does not include an offer of specified securities made through a public issue, rights issue, bonus issue, employee stock option scheme, employee stock purchase scheme or qualified institutions placement or an issue of sweat equity shares or depository receipts issued in a country outside India or foreign securities.

Explanation:

The Foreign Exchange Management Act , 1999 (FEMA) was passed to replace the erstwhile Foreign Exchange Regulation Act (FERA). The main objective behind the Foreign Exchange Management Act (FEMA) is to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments.

Explanation:

As per the (Substantial Acquisition of Shares and Takeovers) Regulations, no acquirer shall acquire shares or voting rights in a target company that, when combined with shares or voting rights held by the acquirer and persons acting in concert with them, would entitle them to exercise 25% or more of the voting rights in the target company unless the acquirer makes a public announcement of an open offer to acquire shares of the target company in accordance with these regulations. This threshold triggers the requirement for a public announcement and open offer.

Explanation:

Where there are more than one lead merchant banker to the issue the responsibilities of each of such lead merchant bankers shall clearly be demarcated and a statement specifying such responsibilities shall be furnished to SEBI at least one month before the opening of the issue for subscription.

Explanation:

SEBI (Issue of Capital and Disclosure Requirements) Regulations provides detailed requirements for disclosure and process in capital market transactions by both listed and unlisted companies that are in the process of listing. These regulations are designed to ensure transparency and fairness in the capital market, outlining specific guidelines for companies to follow during the listing process.

Explanation:

At the time of an issue, the Merchant Banker acts as an interface between the issuer company and the SEBI.

Explanation:

The escrow account established for meeting delisting requirements can consist of either cash deposited with a scheduled commercial bank, or a bank guarantee in favor of the merchant banker, or a combination of both. This provides flexibility in meeting the financial obligations associated with the delisting process.

Explanation:

A merger is a mutual decision of two companies to combine and become one entity. The combined business, through structural and operational advantages secured by the merger, can cut costs and increase profits, boosting shareholder values for both groups of shareholders.

Explanation:

In order to ensure the highest standards of integrity and service to investors and clients, Regulation 21 of the SEBI MB Regulation has prescribed that merchant bankers shall not be lead managers in any issue if a merchant banker who is not holding a certificate of registration from SEBI is associated to the issue.

Explanation:

Offer Document is called a “Prospectus” in case of a public issue or offer for sale and a “Letter of Offer” in case of a rights issue.

Explanation:

‘Net Offer to Public’ refers to the offer of specified securities to the public, excluding reservations made for certain investor categories. It represents the portion of the securities that is available for subscription by the general public, excluding any reservations or allocations for specific groups of investors.

Explanation:

Preferential issue means an issue of specified securities by a listed issuer to any select person or group of persons on a private placement basis and does not include an offer of specified securities made through a public issue, rights issue, bonus issue etc.

Explanation:

The issuer shall file the draft offer document with the stock exchange(s) where the specified securities are proposed to be listed, and submit to the stock exchange(s), the Permanent Account Number, bank account number and passport number of its promoters where they are individuals. In cases where the promoter is a body corporate and Permanent Account Number, bank account number, company registration number or equivalent and the address of the Registrar of Companies with which the promoter is registered should be given.

Explanation:

Section 26 of the Companies Act states that a prospectus issued by or on behalf of a company or in relation to an intended company shall be dated, and that date shall be taken as the date of publication of the prospectus and lays down the matters to be stated and reports which need to be to be set out in the prospectus.

Explanation:

The Depositories Act, 1996 ushered in an era of efficient capital market infrastructure, improved investor protection, reduced risks and increased transparency of transactions in the securities market.

Explanation:

In the case of an IPO, the issuer is required to announce the floor price or price band at least 5 working days before the opening of the bid. For an FPO, this announcement should be made at least 1 working day prior to the opening of the bid. This timeline is specified to ensure that investors have sufficient information and time to make informed decisions before participating in the bidding process.

Explanation:

As per the SEBI ICDR Regulations, promoters and promoters group include:

1. The person or persons who are in control of the issuer.

2. The person or persons who are instrumental in the formulation of a plan or programme.

3. The person or persons named in the offer document as promoters.

In short, promoters and promoters group encompass individuals in control, those involved in planning, and those officially identified as promoters in the offer document.

Explanation:

Promoters can dilute or offload their holdings in listed companies through an “Offer for Sale of Shares.” In this method, promoters directly sell a portion of their existing shares on the stock exchange to the public. This allows them to reduce their shareholding and raise funds without issuing new shares, as is the case with a Qualified Institutional Placement (QIP) or Preferential Issue.