Merchant bank, not issuer, to respond to queries: Sebi

Market regulator Sebi has asked the merchant bankers to respond to any complaints regarding an offer document directly after independently examining the matter, instead of the issuer company coming out with explanations.

In a notification, Sebi advised the merchant bankers to refrain from the current practice of forwarding issuer company? responses without comments from lead managers.

?Merchant bankers shall respond to the complainant directly after independently examining the matter and exercising the due diligence,? the regulator said in a notification.

In the event the complaint has resulted in pointing out inadequate disclosure in the offer document, merchant bankers would provide adequate disclosure and inform Sebi at the earliest, the notification added.

In such informations to Sebi, merchant bankers should state that that clarifications of the issuer company are satisfactory. Further, all relevant disclosures have to be made which must be in compliance with the Sebi (DIP) guidelines.

Sebi has instructed merchant bankers to ensure that all collection agents, centers, syndicate and sub syndicate members engaged in collecting application forms in the initial public offering (IPO) process, should not refuse to accept applications in the absence of photocopy of Permanent Account Number (PAN) card.

Sebi said in a circular that the regulatory guidelines does not mandate any such provision which require submitting photocopy of PAN card along with bid or application form.

It has been brought to Sebi?s notice that in several public issues the collection centres, agents, syndicate, sub syndicate members, lead managers are insisting that the investors have to attach photocopies of PAN cards with the application form.

The regulator said, “Sebi (DIP) Guidelines as amended on November 29, 2007 only require that PAN number must be quoted on the application form irrespective of the size of the application”.

Sebi will hold the merchant bankers responsible if the collection centres, agents, lead managers and others refuse to accept the application of the investors in the absence of the photocopy of the PAN card.