Merchant Banking Certification Free Demo Test 1

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 there with 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:

The Issuer is required to enter into a listing agreement with the Stock Exchanges, where the securities of an issuer are proposed to be listed.

Explanation:

According to SEBI SAST regulations, the open offer for acquiring shares by the acquirer must be for at least twenty-six per cent of the total shares of the target company, as of the tenth working day from the closure of the tendering period. This regulation is designed to ensure a fair and transparent process in the acquisition of shares.

Explanation:

In a public issue of debt securities, the base issue size is required to be a minimum of Rs 100 crore. This stipulation is set to ensure a reasonable size for the issue, reflecting the regulatory intent for a meaningful and substantive offering in the market.

Explanation:

“Merger” is a combination of two or more companies to form a single entity, in which either one or both lose their identity and a new company is formed. A Merger is not necessarily amongst two equal or comparable stature companies

Explanation:

The fees specified shall be payable by the merchant banker by a demand draft in favour of the “Securities and Exchange Board of India” payable at Mumbai or at the respective regional office.

Explanation:

As per the SEBI ICDR regulations, the minimum number of allottees for each placement of eligible securities made under QIP shall not be less than:
(a) two, where the size is less than or equal to Rs.250 crore;
(b) five, where the issue size is greater than Rs. 250 crore, subject to the condition that no single allottee shall be allotted more than 50% of the issue.

Explanation:

For purpose of granting registration to an applicant, SEBI takes into account the “Criteria for fit and proper person” as given under the SEBI (Intermediaries) Regulations 2008. It states – For the purpose of determining as to whether an applicant or the intermediary is a ‘fit and proper person’  the Board may take into account any consideration it deems fit, including but not limited to the following criteria in relation to the applicant or the intermediary, the principal officer and the key management persons by whatever name called –

a) Integrity, reputation and character;
b) Absence of convictions and restraint orders;
c) Competence including financial solvency and networth.

Explanation:

The post-issue reports have to be filed with SEBI.

Explanation:

As per SEBI ICDR Regulations, the minimum subscription to be received in the issue shall be at least 90% of the offer through the offer document. If the issuer does not receive the minimum subscription of 90% of the offer through offer document on the date of closure of the issue, or if the subscription level falls below 90% after the closure of issue, the issuer shall forthwith refund through verifiable means the entire subscription amount received.