BANKING GENERAL KNOWLEDGE
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Question
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SBI
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RBI
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SEBI
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CIBIL
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Detailed explanation-1: -Notes: To act as an underwriter, a certificate of registration must be obtained from Securities and Exchange Board of India (SEBI) . The certificate is granted by SEBI under the Securities and Exchanges Board of India (Underwriters) Regulations, 1993.
Detailed explanation-2: -(2) Notwithstanding anything contained in sub-regulation (1), every stock broker or merchant banker holding a valid certificate of registration under section 12 of the Act, shall be entitled to act as an underwriter without obtaining a separate certificate under these regulations.
Detailed explanation-3: -As per SEBI Guidelines also, the rate of underwriting commission must not exceed 2.5% of the issue price. Therefore, the Underwriting commission on shares as per SEBI guidelines is up to 2.5%.
Detailed explanation-4: -As per the rules of Securities and Exchange Board of India (SEBI), an underwriter is an authorised risk-assessor. The underwriters evaluate the risks in the planning and functioning of the other party. The underwriter has to register themself with SEBI and must be authorised by getting a license.