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CS Professional · Strategic Management and Corporate Finance · Role of Intermediaries in Fund Raising

Under SEBI's regime for public issues, which feature distinguishes a Self Certified Syndicate Bank (SCSB) from an ordinary Banker to an Issue?

An SCSB offers the ASBA facility, blocking the application amount in the investor's own bank account until allotment rather than collecting it upfront. It does not underwrite, determine price or act as registrar, which are the roles of underwriters, book running lead managers and registrars respectively.

  1. AIt blocks funds in the investor's own account under ASBA until allotment, instead of collecting the money upfrontCorrect
  2. BIt underwrites the unsubscribed portion of the issue
  3. CIt decides the issue price through book building
  4. DIt acts as the registrar for allotment and refunds

Explanation

An SCSB offers the ASBA facility, in which the application amount stays in the investor's account and is only blocked until allotment, after which the allotted amount is debited. SCSBs do not underwrite, fix price or act as registrar; price discovery is done by the issuer with the book running lead managers.

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