Merchant Banking Certification Examination Overview
A merchant bank is historically a bank dealing in commercial loans and investment. In modern British usage, it is the same as an investment bank. Merchant banks were the first modern banks and evolved from medieval merchants who traded in commodities, particularly cloth merchants. Historically, merchant banks’ purpose was to facilitate and/or finance production and trade of commodities, hence the name “merchant”. Few banks today restrict their activities to such a narrow scope.
What are the course objectives?
On successful completion of the examination the candidate should:
- Know the basics of the Merchant Banking in India.
- Understand the functioning of Merchant Bankers related to Issue Management Process, Substantial Acquisition of Equity Shares, Buyback of Equity Shares and Delisting of Shares.
- Know the regulatory environment in which the Merchant Bankers operates in India.
Course Fees ?
Name of Module: NISM-Series-IX: Merchant Banking Certification Examination
|Fees (Rs.)||Test Duration (in minutes)||No. of Questions||Maximum Marks||Pass Marks* (%)||Certificate # Validity (in years)|
*: Negative marking – 25% of the marks assigned to the question
+ Payment gateway charges extra.
# Passing Certificate will be issued only to those candidates who have furnished/ updated their Income Tax Permanent Account Number (PAN) in their registration details.
Benefits from this Course ?
- Investors’ Trust
- Economics of Scale
- Resource Utilisation :
- Profitable Diversification
- Easy Marketing :
- One-stop Shopping
Merchant Banking Syllabus
CHAPTER-1: Introduction to the Indian Capital Market
- Understand the Capital market structure in India and the role of capital market in the economy.
- Know the different Products in the Indian Market
for exampleEquity, Debt, and Derivatives.
- Know the different Participants in the Indian Capital Market for example Issuers, Investors, and Intermediaries.
- Know the Regulators and the Regulatory Framework of the Indian securities market in India.
CHAPTER-2: Introduction to the Merchant Banking
- Understand the Concept and Evolution of Merchant Banking
- Highlight the difference between merchant banking and commercial banking.
- List the difference between Merchant Banking and Investment Banking
- Know the evolution of International merchant banking scenario.
- Know the Glass-Steagall Act in brief and its repeal.
- Understand the merchant banking in an Indian context.
- Know the different Regulations governing Merchant Banking Activity in India
CHAPTER-3: Registration, Code of Conduct & General Obligations of Merchant Bankers in India
- Highlight the various activities undertaken by the merchant bankers in India.
- Know the definition of a merchant banker
- Know who can be registered as a merchant banker?
- Understand the eligibility criteria for registering as a Merchant Banker
- Know the Registration Procedure, Renewal Fees and Validity
- Understand the conditions of Registration
- Know the registration requirements of Merchant Bankers as Underwriters
- Understand the Code of Conduct prescribed for Merchant Bankers
- Understand the General Obligations and Responsibilities to be followed by the Merchant Bankers with regards to the following:
- Learn about the Investor Grievance redressal and SCOREs.
CHAPTER-4: Issue Management – Important Terms
- A. Understand the various terms related to Public Offering Initial Public Offer Further Public Offer
- (a) Offer for Sale
- (b) Fresh Issue Net offer to Public Rights Issue Institutional Placement Programme
- (a) Offer for Sale IPP
- (b) FPO IPP QIP / Preferential Allotment Offer for sale through Stock Exchange Mechanism Offer Document,
- Draft Red Herring Prospectus, Red Herring Prospectus Book Building Process Fixed Price Issue Differential Pricing Fast Track Issue
- Green Shoe Option Safety Net ASBA Soft and Hard Underwriting Open and Closed Book Basis of Allocation Categories of Investors
- (a) Retail Individual Investors (RIIs)
- (b) Non-Institutional Investors (NIIs)
- (c) Qualified Institutional Investors (QIBs)
- (d) Anchor Investors Designated Stock Exchange Employee Specified Securities
CHAPTER-5: Issue Management-Process and Underwriting
- Understand the process of issue management and know the merchant banker’s role in it.
- Learn about the appointment of SEBI registered Intermediaries and other intermediaries
- Learn about the process of filing of offer document by the issuer with SEBI and the ROC with the help of the lead Merchant Banker
- List the documents to be submitted before opening of the Issue Copy of agreement between the Issuer and
- (a) Merchant Banker Copy of inter allocation of responsibilities of each Merchant Banker Certificate of compliance
- (b)stating compliance
ofconditions Due diligence certificate while registering DRHP/ Red Herring Prospectus/ prospectus with the ROC/ final post issue report
- Learn about the type of In-Principle approval from recognized stock exchanges for initial public issues as well as in the case
forrights and further public offerings.
- Draft Offer Document to be made Public
- Opening of an issue
- Dispatch of Issue Material and distribution
- Understand how the issuer determines the price of the security in consultation with the Lead Merchant Banker
- Know the role of merchant banker in underwriting of an issue
- Learn about the minimum subscription
- Know how the allotment, refund, and payment of interest is done
CHAPTER-6: Issue Management- General Obligations of Merchant Bankers and Due Diligence
- Understand the general obligations of Intermediaries with respect to Public Issues and Rights Issue
- Know about the Pricing in Preferential Issue
- Know the Pricing and restrictions on allotment of Qualified Institutional Placement
- Know the Pre-issue advertisement for rights issue utilization of funds raised through the rights issue and the manner of disclosures in the offer document.
- Understand the procedure for Institutional Placement Programme w.r.t Offer Document Pricing and allocation/allotment Restrictions
- Minimum number of allottees Restrictions on size of the offer Period of subscription and display of demand Transferability of eligible securities
- Understand the procedure for issue of Indian Depository Receipts (IDRs) w.r.t Eligibility Conditions for issue of IDR
- (a)Minimum Subscription Filing of Draft Prospectus, Due diligence Certificate, Payment of Fees and Issue of advertisements for
- (b)IDR Post Issue Reports Undersubscribed Issue Finalisation of basis of allotment
- Learn about the importance of Due Diligence, the role of external parties in the due diligence process
- List the due diligence documents
CHAPTER-7: Other Merchant Banking Activities – Mergers, Acquisitions & Takeovers
- Understand the difference between Mergers, Acquisitions, and Takeover
- Know the role of Merchant Banker in M&A and Takeovers
- Understand the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 w.r.t Substantial acquisition
- of shares or voting rights Voluntary Offer Offer Size Offer Price Payment Mode Exemptions Process of Open Offer
CHAPTER-8: Other Merchant Banking Activities – Disinvestment, Buyback of Equity Shares
- Understand the Role of Merchant Banker in Disinvestment process
- Know the Role and Obligations of Merchant Banker in Buyback of Equity Shares
- Understand the Role of Merchant Banker in Delisting of Shares
- Understand the Role of Merchant Banker Issue and Listing of Debt Securities
- Know the Role of Merchant Banker in ESOPs