(1) Every applicant eligible for grant of a certificate shall pay such fees in such manner and within the period specified in Schedule II.
(2) Where a merchant banker fails to pay the annual fees as provided in subregulation (1), read with Schedule II, the Board may suspend the registration certificate, whereupon the merchant banker shall cease to carry on any activity as a merchant banker for the period during which the suspension subsists.
CHAPTER III GENERAL OBLIGATIONS AND RESPONSIBILITIES Code of conduct.
13. Every merchant banker shall abide by the Code of Conduct as specified in Schedule III.
40[Merchant banker not to associate with any business other than that of the securities market.
13A. No merchant banker, other than a Bank or a 41[***]Public Financial Institution, who has been granted a certificate of registration under these regulations shall 42[after June 30, 1998] carry on any business other than that in the securities market.
substituted by the Securities and Exchange Board of India (Merchant Bankers) (Amendment) Regulations, 2011 w.e.f. 05-07-2011 and read as under:
―11. Effect of refusal to grant certificate of permanent registration.
Any applicant, whose application for grant of a certificate of permanent registration has been refused by the Board, on and from the date of receipt of the communication, shall not carry on any activity as a merchant banker:
Provided that the Board may, in the interest of investors in the securities market, permit the merchant banker to carry on activities undertaken prior to the receipt of the intimation of refusal subject to such condition as the Board may specify.‖ - Prior to substitution by the Securities and Exchange Board of India (Merchant Bankers) (Amendment) Regulations, 2011 w.e.f. 05-07-2011, the regulation read as under:
― Effect of refusal to grant certificate.
11. Any merchant banker whose application for a certificate has been refused by the Board shall, on and from the date of the receipt of the communication under sub-regulation (2) of regulation 10, cease to carry on any activity as merchant banker.‖ 40 Inserted by the Securities and Exchange Board of India (Merchant Bankers) (Amendment) Regulations, 1997 w.e.f, 09.12.1997.
41 Substituted for the words "Financial Institution" by the Securities and Exchange Board of India (Merchant Bankers) (Amendment) Regulations, 1997 w.e.f, 15.12.1997.
Page 13 of 31 Notwithstanding anything contained above, a merchant banker who prior to the date of notification of the Securities and Exchange Board of India (Merchant Bankers) Amendment Regulations, 1997, has entered into a contract in respect of a business other than that of the securities market may, if he so desires, discharge his obligations under such contract:
43[Provided that a merchant banker who has been granted certificate of registration to act as primary or satellite dealer by Reserve Bank of India, may carry on such business as may be permitted by the Reserve Bank of India.]
44[Provided further that a merchant banker, who has been granted certificate of registration under these regulations, may ensure market making in accordance with Chapter XA of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009]
Explanation: For the purposes of this regulation,—
(i) A ―bank‖ shall mean a banking company as defined under section 5 of the Banking Regulation Act, 1949 (10 of 1949), and the corresponding new bank set up under the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 (5 of 1970), and the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1980 (40 of 1980), State Bank of India Act, 1955 (23 of 1955) and State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959).
(ii) A ―public financial institution‖ shall have the same meaning as assigned to the term under section 4A of the Companies Act, 1956 (1 of 1956) and shall include Industrial Development Corporations and Financial Corporations established by the Central Government or State Governments, as the case may be.]
Maintenance of books of account, records etc.