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According to the rules of SEBI or Securities and Exchange Board of India, an underwriter is an authorized risk assessing entity that works for someone in exchange for some fee. The practice of underwriting is used in commercial, insurance, and investment banking industries. The underwriters assume and evaluate the risk involved in the planning and functioning of the other party. The guidelines for underwriters are prescribed under the Securities and Exchange Board of India (Underwriters) Regulations, 1993. To function as an underwriter, the desiring applicant needs to procure license or registration under the SEBI. In this article, we have discussed the procedure of registration of underwriters with SEBI.
An underwriter is a part of a financial organization. They work for the Insurance industry, mortgage industry, debt securities, equity market, trading, and banking industry. Every industry has its own underwriters, and these individuals must understand the complexity of their specific field. Underwriters determine if providing a loan or issuing an insurance policy will work in favor of their company. They use their knowledge to assess the risk of an applicant. However, if a contract turns out to be risky, the underwriters are held accountable for the loss.
Once the underwriters receive a license of certification after going through the procedure of registration of underwriters under SEBI, can they act as an underwriter for a body corporate.
The applicant who wishes to function as a licensed underwriter must follow the guidelines of the SEBI and receive a certificate of registration from them.
Underwriters need to satisfy specific essential criteria and abide by some fixed procedures, which are mentioned below:
The applicant, after satisfying the eligibility, can file an application for obtaining registration to work as an underwriter. The applicant has to fill out Form A from the link[1].
The application for registration of underwriter consists of two parts, namely:
The general information by the applicant for fulfilling the procedure of registration of underwriters are as follows:
Business information will collect details on the business, as mentioned below:
The SEBI has set up some directions for registration for either new or renewed registration:
The applicant, after fulfilling all the eligibility criteria, will get a certificate in Form-B. The board will send a letter to intimate the applicant about filling of Form B.
The candidate to get registered as underwriter has to pay fees as per Regulation 12 mentioned below:
The underwriter’s need to follow the following code of conduct:
We at Enterslice will help you in the procedure of registration of underwriters:
Underwriters play a critical role in many financial situations. The process of underwriting has many complexities, all of which are based on how well the specifics of your finances line up with the company’s policies. It would be best if you asked questions about the underwriting process during your conversation with your agent or broker or the company in general. The underwriters help the financial institutes and other bodies in its functioning. Therefore the procedure of registration of underwriters is critical.
Also, Read: FPI Registration: SEBI Introduces Common Application Form.
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