All underwriters play a major and important role in the Indian security market. An underwriter is a designated person or company with roles and responsibilities related to the underwriting of issues. The issues would be related to the securities of companies. Under Regulation 29 of the Securities and Exchange Board of India Act, 1992 the govt. has enacted various rules concerning underwriters. It’s important for all sorts of establishments and organisations to get registered with SEBI before the commencement of activities. Thus, Registration of Underwriters with SEBI is compulsory.
If a stockbroker carries out activities associated with underwriting a selected issue, then the capital adequacy requirements need to be fulfilled as prescribed by the stock exchange. If a merchant banker carries out the activities associated with underwriting a selected issue, then the capital adequacy requirements need to be fulfilled as per regulation 7 of the SEBI (Merchant Banker) Regulations 1992.
An underwriter is an individual or a corporation that carries out underwriting of selected issues of shares and securities.
Yes, registration of underwriters is compulsory as per the rules of the Securities Exchange Board of India (Underwriters), 1993.
Underwriting is often defined as an agreement or a contract that has the stipulation and therefore the condition to subscribe to the shares or securities of a corporate or an organisation if the shareholders or public don’t subscribe to the issue.
Compliance with the principles associated with SEBI is one of the benefits of securing this type of registration.
The applicant must be made by giving details in Form ‘A’ for registration.