Under Sebi norms, every merchant banker should submit complete particulars of the transactions relating to the acquisition of securities of the body corporate whose securities are managed by the merchant banker.
Markets regulator Sebi on Thursday imposed a fine of Rs 5 lakh on Axis Bank for violation of merchant banker regulations. Axis Bank is registered as a merchant banker with the Securities and Exchange Board of India (Sebi).
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The regulator had conducted an examination of the debt capital market operations of Axis Bank during August 2016 to August 2019 period. It was observed that Axis Bank (noticee) had acted as the merchant banker in respect of 22 public issuances of debt of various companies during the given period. During that time, it had also acquired securities in respect of nine public issues of debt made by the said companies.
However, Axis Bank failed to make the requisite disclosures under the merchant bankers regulations following which Sebi has imposed a penalty on the entity. Under Sebi norms, every merchant banker should submit complete particulars of the transactions relating to the acquisition of securities of the body corporate whose securities are managed by the merchant banker. This has to be done within 15 days from the date of such transactions.
In an 11-page order, Sebi's Adjudicating Officer Suresh B Menon said the noticee has failed to comply with the requirements under the merchant bankers regulations for almost three years -- from August 2016 to August 2019. "I find that the material made available has not shown any instances of investor complaints received against the noticee on account of the above non-compliance by the noticee. The noticee as per its submission has also taken necessary corrective steps to avoid recurrence of such lapses," he said in the order.
However, he noted that the noticee as a registered market intermediary has failed to comply with the obligation cast on it under the merchant bankers regulations for three consecutive years and imposed Rs 5 lakh penalty. Sebi examined the noticee's debt capital market operations on the basis of a reference in December 2019 received from the bank with respect to the internal review of its debt capital market business.