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    Setting Up and Management of Merchant Banking

    Uploaded by

    Rajeswari Kuttimalu
    This document summarizes the key roles and requirements for merchant banking. It discusses that merchant banks help transform project ideas into industrial ventures through various activities like market surveys and obtaining necessary approvals. They also help clients with important decisions regarding financial structure, management, and public issues. To be successful, merchant bankers must have the ability to analyze technical, financial, and economic aspects of projects as well as knowledge of capital markets. Guidelines from the Securities and Exchange Board of India (SEBI) require merchant bankers to be authorized and meet criteria for qualifications, infrastructure, capital, and reputation. SEBI classifies merchant bankers into four categories based on their permitted roles and required net worth.

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    Setting Up and Management of Merchant Banking

    Uploaded by

    Rajeswari Kuttimalu
    920 views8 pages
    This document summarizes the key roles and requirements for merchant banking. It discusses that merchant banks help transform project ideas into industrial ventures through various activities like market surveys and obtaining necessary approvals. They also help clients with important decisions regarding financial structure, management, and public issues. To be successful, merchant bankers must have the ability to analyze technical, financial, and economic aspects of projects as well as knowledge of capital markets. Guidelines from the Securities and Exchange Board of India (SEBI) require merchant bankers to be authorized and meet criteria for qualifications, infrastructure, capital, and reputation. SEBI classifies merchant bankers into four categories based on their permitted roles and required net worth.

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    Setting Up and Management of Merchant Banking

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    This document summarizes the key roles and requirements for merchant banking. It discusses that merchant banks help transform project ideas into industrial ventures through various activities like market surveys and obtaining necessary approvals. They also help clients with important decisions regarding financial structure, management, and public issues. To be successful, merchant bankers must have the ability to analyze technical, financial, and economic aspects of projects as well as knowledge of capital markets. Guidelines from the Securities and Exchange Board of India (SEBI) require merchant bankers to be authorized and meet criteria for qualifications, infrastructure, capital, and reputation. SEBI classifies merchant bankers into four categories based on their permitted roles and required net worth.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    920 views8 pages

    Setting Up and Management of Merchant Banking

    Uploaded by

    Rajeswari Kuttimalu
    This document summarizes the key roles and requirements for merchant banking. It discusses that merchant banks help transform project ideas into industrial ventures through various activities like market surveys and obtaining necessary approvals. They also help clients with important decisions regarding financial structure, management, and public issues. To be successful, merchant bankers must have the ability to analyze technical, financial, and economic aspects of projects as well as knowledge of capital markets. Guidelines from the Securities and Exchange Board of India (SEBI) require merchant bankers to be authorized and meet criteria for qualifications, infrastructure, capital, and reputation. SEBI classifies merchant bankers into four categories based on their permitted roles and required net worth.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 8

    Setting up and management of merchant banking

    Presented by Rajeswari.B

    Merchant bank
    transform the project ideas into industrial ventures. Undertaking various activities :
    Market survey Choice of suitable location and size Preparation of document Obtain consent from authorities

    Help in taking important decisions; financial mix, management of public issues, credit syndication Success depends on quality of services and soundness of advices to clients

    Qualities required of Merchant bankers


    Ability to analyze; technical, financial, economic aspects concerning the formation of industrial projects Knowledge about capital market, trend in stock market, psychology of investing public, changing environment etc. Ability to build Bank-client relationship Innovative approach in developing capital market instruments Maintenance of high professional standards

    Guidelines for merchant bankers


    Merchant banking require authorization by SEBI a. Criteria
    Professional qualification Infrastructure Two experienced employees Capital adequacy General reputation and fairness in all transactions.

    Cont..
    SEBI classifying the merchant bankers into four category.
    1. Consists of merchant bankers who determine financial structure, tie-up of financiers and final allotment and to act in the capacity of managers, advisor, portfolio manager and underwriter. Minimum net worth Rs.1 cr 2. Consists of those authorized to act in the capacity of comanager/advisor, consultant etc. net worth Rs.50 Lakhs 3. Consists of merchant bankers who act as under writer . Net worth Rs.20 Lakhs 4. Consists of merchant bankers who act as advisor. Net worth is nil

    Initial authorization fee, annual fee, renewal fee collected by SEBI All issues must managed at least one authorized banker; sole manager, lead manager The lead merchant banker holding a certificate under category 1 shall accept minimum under writing obligation of 5% of Rs.25 Lakh Each merchant banker is required to furnish to the SEBI half yearly unaudited financial results The banker must perform duties with highest standard of integrity and fairness in all his dealings.

    Cont..
    SEBI will supervise the activities of merchant bankers SEBI has been vested with the power to suspend or cancel the authorization in case of violation of the guidelines. To ensure transparency and accountability in the operation of merchant bankers to protect the investors Inspection will be conducted by SEBI to ensure the regulations are properly complied with and to investigate the complaints from customers.

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