(1) The Board may require the applicant to furnish further information or clarification regarding matters relevant to the activity of a merchant banker for the purpose of disposal of the application.
(2) The applicant or its principal officer shall, if so required, appear before the Board for personal representation.
Consideration of application.
6. The Board shall take into account for considering the grant of a certificate, all matters which are relevant to the activities relating to merchant banker and in particular the applicant complies with the following requirements, namely :— 16[(a) the applicant shall be a body corporate other than a non-banking financial company as defined under clause (f) of section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934), as amended from time to time :
14 Sub-regulation 2A to regulation 3 was inserted by SEBI (Merchant Bankers) (Amendment) Regulations, 1997 w.e.f, 09.12.1997.
15 Omitted by the Securities and Exchange Board of India (Merchant Bankers) (Third Amendment) Regulations, 2006 w.e.f. 7-9-2006
16.
Clause (a) to regulation 6 was inserted by the Securities and Exchange Board of India (Merchant Bankers) (Amendment) Regulations, 1997 w.e.f., 09.12.1997.
Page 7 of 31 17[Provided that the merchant banker who has been granted registration by the Reserve Bank of India to act as a primary or satellite dealer may carry on such activity subject to the condition that it shall not accept or hold public deposit;]
18[(aa)] the applicant has the necessary infrastructure like adequate office space, equipments, and manpower to effectively discharge his activities;
(b) the applicant has in his employment minimum of two persons who have the experience to conduct the business of merchant banker;
(c) a person directly or indirectly connected with the applicant has not been granted registration by the Board.
Explanation : For the purposes of this clause the expression ―directly or indirectly connected‖ means any person being an associate, subsidiary or interconnected or group company of the applicant in case of the applicant being a body corporate;
(d) The applicant fulfils the capital adequacy requirement specified in regulation 7;
(e) The applicant, his partner, director or principal officer is not involved in any litigation connected with the securities market which has an adverse bearing on the business of the applicant;
(f) The applicant, his director, partner or principal officer has not at any time been convicted for any offence involving moral turpitude or has been found guilty of any economic offence;
(g) The applicant has the professional qualification from an institution recognised by the Government in finance, law or business management;
19[(gg) the applicant is a fit and proper person;]
(h) grant of certificate to the applicant is in the interest of investors.
20[Criteria for fit and proper person.
6A. For the purpose of determining whether an applicant or the merchant banker is a fit and proper person the Board may take into account the criteria specified in Schedule II of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008.]
21[Capital adequacy requirement.
17.
Proviso to clause (a) to regulation 6 was inserted by the Securities and Exchange Board of India (Merchant Bankers) (Amendment) Regulations, 1999 w.e.f., 17.11.1999.
18.
Clause (a) to regulation 6 was renumbered as (aa) by the Securities and Exchange Board of India (Merchant Bankers) (Amendment) Regulations, 1997 w.e.f., 09.12.1997.
19 Clause (gg) to regulation 6 was inserted by the Securities and Exchange Board of India (Merchant Bankers) (Amendment) Regulations, 1997 w.e.f., 09.12.1997 20 Inserted by the Securities and Exchange Board of India (Criteria for fit and Proper Person Regulations, 2004) w.e.f. 10-3-2004.
21 Substituted by the Securities and Exchange Board of India (Merchant Bankers) (Third Amendment) Regulations, 2006. w.e.f. 7-9-2006. Prior to the substitution the regulation (7) read as ―Capital Adequacy Requirement