valid as on 20/10/2020

Regulation 5 - Appointment of merchant banker and other intermediaries
Effective from 26-08-2009

(1) The issuer shall appoint one or more merchant bankers, at least one of whom shall be a lead merchant banker and shall also appoint other intermediaries, in consultation with the lead merchant banker, to carry out the obligations relating to the issue.

(2) The issuer shall, in consultation with the lead merchant banker, appoint only those intermediaries which are registered with the Board.

(3) Where the issue is managed by more than one merchant banker, the rights, obligations and responsibilities, relating inter alia to disclosures, allotment, refund and underwriting obligations, if any, of each merchant banker shall be predetermined and disclosed in the offer document as specified in .

 where any of the merchant bankers is an associate of the issuer, it shall declare itself as a marketing lead manager and its role shall be limited to marketing of the issue.

(4) The lead merchant banker shall, only after independently assessing the capability of other intermediaries to carry out their obligations, advise the issuer on their appointment.

(5) The issuer shall enter into an agreement with the lead merchant banker in the format specified in and with other intermediaries as required under the respective regulations applicable to the intermediary concerned:

Provided that such agreements may include such other clauses as the issuer and the intermediary may deem fit without diminishing or limiting in any way the liabilities and obligations of the merchant bankers, other intermediaries and the issuer under the Act, the Companies Act, 1956, the Securities Contracts (Regulation) Act, 1956, the Depositories Act, 1996 and the rules and regulations made thereunder or any statutory modification or statutory enactment thereof:

Provided further that in case of ASBA process, the issuer shall take cognisance of the deemed agreement of the issuer with Self Certified Syndicate Banks.

(6) An issuer shall, in case of an issue made through the book building process, appoint syndicate members and in the case of any other issue, appoint bankers to issue, at all mandatory collection centres as specified in and such other collection centres as it may deem fit.

(7) The issuer shall appoint a registrar which has connectivity with all the depositories:
Provided that if issuer itself is a registrar to an issue registered with the Board, then another registrar to an issue shall be appointed as registrar to the issue:

Provided further that the lead merchant banker shall not act as a registrar to the issue in which it is also handling the post issue responsibilities.

Explanation: For the purpose of this regulation, in case of a book built issue, the lead merchant banker appointed by the issuer shall act as the lead book runner.

To view the schedule,Click Here
Substituted vide SEBI (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2012, w.e.f. 12.10.2012. To view the notification,Click Here
Inserted vide SEBI (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2012, w.e.f. 12.10.2012. To view the notification,<a href=”  https://ca2013.com/notifications/sebi-issue-capital-disclosure-requirements-fourth-amendment-regulations-2012-w-e-f-12-10-2012/” target=”_blank”>Click Here</a>
To view the schedule,Click Here
To view the schedule,Click Here

SEBI (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2012, w.e.f. 12.10.2012


ICDR SCHEDULE I – INTER-SE ALLOCATION OF RESPONSIBILITIES

[See regulation 5(3) and 101(2)]

(1) The lead merchant bankers shall make inter-se allocation of responsibilities pertaining to the activities or sub-activities to be carried out under these regulations.

(2) The lead merchant bankers shall delineate the activity-wise allocation of responsibilities and intimate the Board about the name of the lead merchant banker responsible for each set of the activities or sub-activities at the time of filing the draft offer document with the Board. This intimation must be signed by all the lead merchant bankers to the issue.

(3) Where circumstances warrant joint and several responsibility of the lead merchant bankers for any particular activity, a co-ordinator designated from among the lead merchant bankers (hereinafter referred to as the “designated lead merchant banker”) shall furnish to the Board, when called for, information, report, comments, etc. on matters relating to such activity.

(4) The activities or sub-activities may be grouped on the following lines:

(a) Capital structuring with the relative components and formalities such as composition of debt and equity, type of instruments, etc.

(b) Drafting and design of the offer document and of the advertisement or publicity
material including newspaper advertisement and brochure or memorandum containing salient features of the offer document.

(c) Selection of various agencies connected with issue, such as registrars to the issue,
printers, advertising agencies, etc.

(d) Marketing of the issue, which shall cover, inter alia, formulating marketing strategies, preparation of publicity budget, arrangements for selection of (i) ad-media, (ii) centres for holding conferences of stock brokers, investors, etc., (iii) bankers to the issue, (iv) collection centres as per schedule III, (v) brokers to the issue, and (vi) underwriters and underwriting arrangement, distribution of publicity and issue material including application form, prospectus and brochure and deciding upon the quantum of issue material.

(e) Post-issue activities, which shall involve essential follow-up steps including follow-up with bankers to the issue and Self Certified Syndicate Banks to get quick estimates of collection and advising the issuer about the closure of the issue, based on correct
figures, finalisation of the basis of allotment or weeding out of multiple applications,
listing of instruments, despatch of certificates or demat credit and refunds and coordination with various agencies connected with the post-issue activity such as
registrars to the issue, bankers to the issue, Self Certified Syndicate Banks, etc.
Ordinarily, one lead merchant banker shall be responsible for the post-issue activities.

(5) The designated lead merchant banker shall be responsible for ensuring compliance with these regulations and other requirements and formalities specified by the Registrar of Companies, the Board and the recognised stock exchanges where specified securities being offered are proposed to be listed.

(6) Even if many of the post-issue activities are handled by other intermediaries, the designated lead merchant banker shall be responsible for ensuring that these intermediaries fulfil their functions and enable him to discharge this responsibility through suitable agreements with the issuer.

(7) In case of under-subscription in an issue, the lead merchant banker responsible for
underwriting arrangements shall be responsible for invoking underwriting obligations and
ensuring that the notice for devolvement containing the obligations of the underwriters is
issued in terms of these regulations.


ICDR SCHEDULE II – FORMAT OF AGREEMENT BETWEEN LEAD MERCHANT BANKERS TO THE ISSUE AND ISSUER/ISSUING COMPANY

[See regulations 5(5) and 101(1)]

This Agreement made BETWEEN……. (name of the issuer), having its registered office at ……… (registered office address of the issuer) (hereinafter referred to as “the issuer”) AND …………. (name of the lead merchant bankers), having their registered office at…………………. with the branch office at …….

WHEREAS:

(1) The issuer is taking steps for the issue of …………………. (particulars of the issue) to the public/existing shareholders of the issuer (the said issue of specified securities hereinafter referred to as “the issue”); AND

(2) The issuer has approached the lead merchant bankers to manage the issue and the lead
merchant bankers have accepted the engagement inter-alia, subject to the issuer entering into an agreement for the purpose being these presents;

NOW, THEREFORE, the issuer and the lead merchant bankers do hereby agree as follows:

(1) Besides the lead merchant bankers, ………., …………, and …………….. would be acting as the co-managers to the issue.

(2) The issuer hereby declares that it has complied with or agrees to comply with all the statutory formalities under the Companies Act, 1956, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and other conditions, instructions and advices issued by Securities and Exchange Board of India (hereinafter referred to as “the Board”) and other relevant statutes to enable it to make the issue and in particular in respect of the following matters:
(Give details and particulars of statutory compliances which the issuer has to fulfil before
making the issue)
Consent of the shareholders has been obtained vide ……….. (details of the resolution) passed in the general meeting held on ………….. (date of the meeting).

(3) The issuer undertakes and declares that any information made available to the lead merchant banker or any statement made in the offer document shall be complete in all respects and shall be true and correct and that under no circumstances it shall give or withhold any information or statement which is likely to mislead the investors.

(4) The issuer also undertakes to furnish complete audited annual reports, other relevant
documents, papers, information relating to pending litigations, etc. to enable the lead
merchant banker to corroborate the information and statements given in the offer document.

(5) The issuer shall, if so required, extend such facilities as may be called for by the lead
merchant banker to enable them to visit the plant site, office of the issuer or such other places to ascertain for themselves the state of affairs of the issuer including the progress made in respect of the project implementation, status and other facts relevant to the issue.

(6) The issuer shall extend all necessary facilities to the lead merchant banker to interact on any matter relevant to the issue with the solicitors / legal advisors, auditors, consultants, advisors to the issue, financial institutions, banks or any other organisation and any other intermediary associated with the issue in any capacity whatsoever.

(7) The issuer shall ensure that all advertisements prepared and released by the advertising agency or otherwise in connection with the issue conform to the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and the instructions given by the lead merchant banker from time to time and that it shall not make any misleading or incorrect statement in any public communication or publicity material including corporate, product and issue advertisements of the issuer, interviews by its promoters, directors, duly authorized employees or representatives of the issuer,
documentaries about the issuer or its promoters, periodical reports and press releases issued by the issuer or research report made by the issuer, any intermediary concerned with the issue or their associates or at any press, brokers’ or investors’ conferences.

(8) The issuer shall not, without the prior consent of the lead merchant banker, appoint other intermediaries (except Self Certified Syndicate Banks) or other persons associated with the issue such as advertising agencies, printers, etc. for printing the application forms, allotment advices, allotment letters, share certificates / debenture certificates, refund orders or any other instruments, circulars, or advices.

(9) The issuer shall, whenever required and wherever applicable, in consultation with the lead merchant banker, enter into an agreement with the intermediaries associated with the issue, clearly setting forth their mutual rights, responsibilities and obligations. A certified true copy of such agreements shall be furnished to the lead merchant banker.

(10) The issuer shall take such steps as are necessary to ensure completion of allotment and despatch of letters of allotment and refund orders to the applicants including non–resident Indians soon after the basis of allotment is approved by designated stock exchanges but not later than the specified time limit and in the event of failure to do so, pay interest to the applicants as provided under the Companies Act, 1956 as disclosed in the offer document.

(11) The issuer shall take steps to pay the underwriting commission and brokerage to the
underwriters, stock brokers, etc. within the time specified in any agreement with such
underwriters, stock brokers, etc. or within a reasonable time.

(12) The issuer undertakes to furnish such information and particulars regarding the issue as may be required by the lead merchant banker to enable them to file a report with the Board in respect of the issue.

(13) The issuer shall keep the lead merchant banker informed if it encounters any problems due to dislocation of communication system or any other material adverse circumstance which is likely to prevent or which has prevented the issuer from complying with its obligations, whether statutory or contractual, in respect of the matters pertaining to allotment, dispatch of refund orders, share certificates or debenture certificates, demat credit, etc.

(14) The issuer shall not resort to any legal proceedings in respect of any matter having a bearing on the issue except in consultation with and after receipt of advice from the lead merchant banker.

(15) The issuer shall not access the moneys raised in the issue till finalisation of the basis of
allotment or completion of issue formalities.

(16) The issuer shall refund the moneys raised in the issue to the applicants, if required to do so for any reason such as failing to get listing permission or under any direction or order of the Board. The issuer shall pay requisite interest amount if so required under the laws or direction or order of the Board.

(17) (Rights of lead merchant banker vis-à-vis the issuer )————- (give details).

(18) (Consequences of breach) ——— (give details).

In Witness whereof the parties hereto have put their hands on this ———– (date) day of ……(month) of ………… (year).


ICDR SCHEDULE III – MANDATORY COLLECTION CENTRES

[See regulation 5(6) and 101(7)]

(1) The minimum number of collection centres shall be as follows:

(a) The four metropolitan centres situated at Mumbai, Delhi, Kolkata and Chennai.

(b) All such places where the recognised stock exchanges are located in the region in
which the registered office of the issuer is situated;

(c) The region-wise collection centres are as indicated hereunder:

Sr. No.Name of the Recognised Stock ExchangeCity
(A)NORTHERN REGION
(i)Ludhiana Stock Exchange Ltd.Ludhiana
(ii)Delhi Stock Exchange Ltd.Delhi
(iii)Jaipur Stock Exchange Ltd.Jaipur
(iv)U.P. Stock Exchange Ltd.Kanpur
(B)SOUTHERN REGION
(i)Bangalore Stock Exchange Ltd.Bangalore
(ii)Cochin Stock Exchange Ltd.Cochin
(iii)Madras Stock Exchange Ltd.Madras
(C)EASTERN REGION
(i)Calcutta Stock Exchange Association Ltd.Kolkata
(ii)Gauhati Stock Exchange Ltd.Gauhati
(iii)Bhubaneswar Stock Exchange Ltd.Bhubaneswar
(D)WESTERN REGION
(i)Bombay Stock Exchange Ltd.Mumbai
(ii)National Stock Exchange of India Ltd.Mumbai
(iii)OTC Exchange of India Ltd.Mumbai
(iv)Pune Stock Exchange Ltd.Pune
(v)M P Stock Exchange Ltd.Indore
(vi)Vadodara Stock Exchange Ltd.Vadodara
(vii)Ahmedabad Stock Exchange Ltd.Ahmedabad

(2) In addition to the collection centres specified in para (1), all designated branches of Self
Certified Syndicate Banks, as displayed on the websites of such banks and of the Board, shall be deemed to be mandatory collection centres

(3) The issuer may appoint any other collection centre/s as it may deem fit in addition to the minimum collection centre specified in this Schedule.


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