Skip to content

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

Under the SEBI (Merchant Bankers) Regulations, 1992, which statement correctly describes the role of a merchant banker acting as a lead manager to a public issue of securities?

A lead manager is a SEBI-registered merchant banker who manages the public issue, performs due diligence on the issuer's disclosures and files the draft offer document with SEBI. It does not guarantee listing gains, fix price alone, or act as auditor.

  1. AIt guarantees that the issue will be listed at a premium on the stock exchange
  2. BIt manages the issue process, carries out due diligence and files the offer document with SEBICorrect
  3. CIt decides the final issue price without any involvement of the issuer
  4. DIt acts as the statutory auditor of the issuer during the issue

Explanation

A lead manager is a SEBI-registered merchant banker who manages the issue, carries out due diligence of the issuer's disclosures and submits the draft offer document and due diligence certificate to SEBI. It does not guarantee listing gains, does not fix price independently of the issuer, and is not the auditor.

Did you get it right without looking?

One question tells you little. A timed set on Role of Intermediaries in Fund Raising shows your real accuracy, how long you take and where you lose marks.

Practise Role of Intermediaries in Fund RaisingFree diagnostic mock

More Role of Intermediaries in Fund Raising questions