Merchant Banking Certification Free Demo Test 10

Explanation:

As per the SEBI ICDR Regulations, promoters and promoters group include:

1. The person or persons who are in control of the issuer.

2. The person or persons who are instrumental in the formulation of a plan or programme.

3. The person or persons named in the offer document as promoters.

In short, promoters and promoters group encompass individuals in control, those involved in planning, and those officially identified as promoters in the offer document.

Explanation:

In the case of an IPO, the issuer is required to announce the floor price or price band at least 5 working days before the opening of the bid. For an FPO, this announcement should be made at least 1 working day prior to the opening of the bid. This timeline is specified to ensure that investors have sufficient information and time to make informed decisions before participating in the bidding process.

Explanation:

The Depositories Act, 1996 ushered in an era of efficient capital market infrastructure, improved investor protection, reduced risks and increased transparency of transactions in the securities market.

Explanation:

Promoters can dilute or offload their holdings in listed companies through an “Offer for Sale of Shares.” In this method, promoters directly sell a portion of their existing shares on the stock exchange to the public. This allows them to reduce their shareholding and raise funds without issuing new shares, as is the case with a Qualified Institutional Placement (QIP) or Preferential Issue.

Explanation:

Section 26 of the Companies Act states that a prospectus issued by or on behalf of a company or in relation to an intended company shall be dated, and that date shall be taken as the date of publication of the prospectus and lays down the matters to be stated and reports which need to be to be set out in the prospectus.

Explanation:

The issuer shall file the draft offer document with the stock exchange(s) where the specified securities are proposed to be listed, and submit to the stock exchange(s), the Permanent Account Number, bank account number and passport number of its promoters where they are individuals. In cases where the promoter is a body corporate and Permanent Account Number, bank account number, company registration number or equivalent and the address of the Registrar of Companies with which the promoter is registered should be given.

Explanation:

Preferential issue means an issue of specified securities by a listed issuer to any select person or group of persons on a private placement basis and does not include an offer of specified securities made through a public issue, rights issue, bonus issue etc.

Explanation:

‘Net Offer to Public’ refers to the offer of specified securities to the public, excluding reservations made for certain investor categories. It represents the portion of the securities that is available for subscription by the general public, excluding any reservations or allocations for specific groups of investors.

Explanation:

Offer Document is called a “Prospectus” in case of a public issue or offer for sale and a “Letter of Offer” in case of a rights issue.

Explanation:

In order to ensure the highest standards of integrity and service to investors and clients, Regulation 21 of the SEBI MB Regulation has prescribed that merchant bankers shall not be lead managers in any issue if a merchant banker who is not holding a certificate of registration from SEBI is associated to the issue.