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NISM Series IX: Merchant Banking Certification Mock Test (Set 1)

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NISM Series IX: Merchant Banking Certification Mock Test (Set 1)

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1.

When there’s more than one main banker for a business offering its shares to the public, each banker’s duties should be clearly defined. A document stating these responsibilities must be given to SEBI (Securities and Exchange Board of India) at least ________ days before the start of the subscription period.

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2. Which law or rule gives the SEBI the authority to exempt certain situations from the requirement to make a public offer, as long as specific conditions are met?

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3. __________ is when someone promises to buy something right from the start.

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4.

In every kind of __________, the merchant banker plays a crucial role, making things happen for the whole deal.

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5.

Further Public Offer [FPO] can be made only through book-building issues through the stock exchange route. State Whether True or False?

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6. What helps figure out the right price and interest in stocks during an Initial Public Offering (IPO)?

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7. Are Mutual Funds in India classified as Institutional investors? True or False?

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8. A company needs to have a minimum paid up capital of Rs 10 crore to list on BSE and Rs 20 crore to list on NSE – State whether True or False ?

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9.

One of the criteria which has to be satisfied by a company which wants to come out with a public issue in the ‘Fast Track Issue ‘ process is that the company has redressed at least _____ of the total shareholder / investor grievances or complaints re

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10.

M/s ABC has come out with a public issue and its issue gets oversubscribed on the first day itself. Can it advertise this in newspapers before the issue closing date ?

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11. A company intends to issue convertible debt instruments, but it has defaulted on repaying the principal amount of a previously issued debt security by three months. Is the company allowed to issue the convertible debt instruments?

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12.

In a merger, the merchant banker handles functions related to ________:

i) Appointment of Company Secretary

ii) Legal counseling

iii) Valuation and due diligence

iv) Deal structuring negotiations

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13. Warrants can be issued along with a public issue or rights issue of specified securities, and a specified security may have _______ warrant(s) attached to it.

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14. Can a promoter of XYZ company, who was barred from accessing the capital market by SEBI last year due to insider trading, be eligible to conduct a public issue to raise resources?

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15.

When issuing debt securities, how much of the oversubscription money can the issuers retain?

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16. As per the listing agreement of BSE and NSE, the issuer must have a minimum paid-up capital and a minimum market capitalization of ___________.

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17. What is the term for an offer of specified securities by a listed issuer to the shareholders of the issuer as on the record date fixed for the said purpose?

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18.

A company planning to issue securities must submit the draft offer document to _______ through the merchant bankers after payment of fees as stipulated in SEBI (ICDR) Regulations.

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19. What is the minimum amount of subscription required in a public offer?

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20. In an _________, the merchant banker, along with the issuer, ensures that the demand for the securities and the bids are displayed online on the website of the Stock Exchanges.

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21.

Is it true or false that, according to SEBI ICDR Regulations, the lead merchant banker and the recognized stock exchange must provide a copy of the draft offer document and final offer document to any investor for free when requested?

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22. Which of the following issues will SEBI not address through the SEBI Complaints Redress System (SCORES)?

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23. As per the SEBI (Merchant Bankers) Regulations, 1992, a body corporate other than a ______ can engage in activities related to being a merchant banker.

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24. For purpose of granting registration to an applicant, SEBI takes into account the Criteria for fit and proper personrdquo; as given under the ____________

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25. A company can buy-back its shares or other specified securities using which of the following method[s]?

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26.

______ are the activities conducted by a Merchant Banker:

I – Merger and Acquisition

II – Stock Trading

III – Printing and Distribution of application forms

IV – Issue of debt securities

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27.

Government securities in India are issued by the _______.

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28.

Warrants can be issued with a public issue or rights issue of specified securities, but the duration of such warrants should not exceed _____ months from their date of allotment in the public/rights issue.

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29.

________ is an application that includes an authorization to reserve the application money in the bank account for subscribing to an issue.

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30. Is it true or false that derivatives are investment vehicles where people with similar investment objectives come together to pool their money?

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31.

The non-refundable fees payable to SEBI are prescribed in the SEBI (Substantial Acquisition of shares and takeovers SAST) Regulations for an open offer of above Rs 5000 crore is Rs25 crore plus 001 per cent of the portion of the offer size in excess

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32.

If a merchant banker intends to make significant changes in its control but fails to inform SEBI about these proposed changes, will this action impact the merchant banker’s certificate of registration?

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33.

If the shares are not allotted to the investor, the Merchant Banker must refund the application money within how many days from the date of closure of the issue?

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34.

The Qualified Institutional Placement shall be made at a price not less than the average of the weekly high and low of the closing prices of the equity shares of the same class quoted on the stock exchange during the ______ weeks preceding the relevant date.

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35.

In cases of devolvement on underwriters, the merchant banker must ensure that the notice for devolvement, containing the obligations of the underwriters, is issued within a period of _____ days from the date of closure of the issue.

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36.

How can a company repurchase its shares or other specified securities?

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37.

As per the SEBI ICDR Regulations, subject to proper compliance’s with the Act and the Regulations, a public issue or a rights issue may be opened within _____ months from the date of issuance of the observations by SEBI

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38.

The non-refundable fees payable to SEBI are specified in the SEBI (Substantial Acquisition of Shares and Takeovers – SAST) Regulations for an open offer of above Rs 5000 crore. It is Rs 25 crore plus 0.01 percent of the portion of the offer size exceeding Rs 5000 crore, subject to a minimum of Rs _______.

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39. According to SEBI ICDR Regulations, for an initial public offer, the issuer company must have net tangible assets of at least _______ in each of the preceding three full years, with not more than 50% held in monetary assets.

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40. For the purpose of granting registration to an applicant, SEBI takes into account the criteria for a fit and proper person as outlined in the ____________.

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41.

Which of the following individuals or entities will not be considered a promoter solely because they hold 20% or more of a company’s equity share capital?

1. Category III foreign portfolio investor

2. Financial institution

3. Mutual Fund

4. Scheduled bank

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42.

According to SEBI ICDR Regulation, a person will not be considered a promoter solely because they hold 20% or more of the equity share capital of the issuer. This rule applies to which of the following:

i) Category III foreign portfolio investor
ii) Mutual Fund
iii) Scheduled commercial bank
iv) Financial institution

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43.

Under SEBI (Prohibition of Insider Trading) Regulations, the code of conduct must include guidelines for suitable _________ procedures and processes that allow designated individuals to cross the wall.

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44.

Options give the seller the right, but not the obligation, to sell a specified amount of the underlying asset at a predetermined price on or before a specified date.

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45.

Merchant bankers must keep documents related to due diligence conducted in pre-issue and post-issue activities, as well as in cases of takeover, buy-back, and delisting of securities, preserved for ___ years.

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46.

A merchant banker, holding a valid registration certificate, is required to pay a fee of ______ every three years to maintain the registration.

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47.

If the issuer chooses the alternate method of book building, the specified securities may be offered to its employees at a price not lower than ______ above the floor price.

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48. True or False: Can a merchant banker serve as a lead manager if they are a promoter or director of the issuer of securities?

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49. True or False: In India, besides other regulators, Mergers and Acquisitions are also governed by the Competition Act 2002?

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50.

In accordance with SEBI (Delisting of Equity Shares) Regulations, a company cannot apply for delisting, and no stock exchange can permit it, unless a period of _____ years has passed since the shares were initially listed.

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