Registration of Underwriters with SEBI

Code of Conduct for SEBI-Registered Underwriters

The code of conduct for underwriters seeking registration under SEBI guidelines for underwriting is as discussed below:

Protect Client’s Interest

Every underwriter seeking registration under the SEBI Guidelines must make efforts for the protection of the interests of its clients.

Maintain Standards

Every underwriter must maintain high standards of integrity, dignity, and fairness in the conduct of its business.

Act Ethically

An underwriter must ensure that it and its personnel act ethically in all their dealings with a body corporate making an issue of securities.

Avoid Conflict of Interest

An underwriter must ensure that they avoid any conflicts of interest and make adequate disclosure of their interests.

Moreover, a mechanism to resolve any situation of conflict of interest must also be in place as a responsible step.

Eliminate Unfair Competition

The underwriters must not indulge in unfair competition, which could harm the interests of other underwriters carrying on the business or underwriting or likely to place such other underwriters.

Maintain Confidentiality

The underwriters must not divulge to other issuer, the press, or any party any confidential information about the issuer company.

No Investment Advice

AN underwriter or any of its employees is barred from rendering, either directly or indirectly, any investment advice about any security in the publicly accessible media.

Internal Control Procedure

An underwriter must have internal control procedures and financial and operational capabilities that can be reasonably expected to protect its operations, clients, and other registered entities from financial loss.

Eliminate Suppression of Material Facts

The underwriters must eliminate the suppression of material facts in any documents, reports, pages, or information furnished to the Board.

Process for Registration of Underwriters with SEBI

The process for registration of underwriters with SEBI requires compliance with the following steps, as discussed below:

How Long Does It Take to Get SEBI Registration Underwriters?

SEBI registration underwriters generally take around 2 to 3 months, depending on the completeness of documentation, compliance readiness, and responsiveness during SEBI’s review process. The estimated timeline is given below:

Documents Needed for Registration of Underwriters with SEBI

The list of essential documents needed for the registration of underwriters with SEBI is as follows:

Activities Associated with Registration of Underwriters with SEBI

The underwriters registered with SEBI primarily deal with the financial sector, specifically in the capital market, equity, and debt securities industries. Registration of underwriters with SEBI allows underwriters to operate legally and contribute to the development of the Indian financial market.

You can participate in primary market activities, manage risks, and provide advisory services to issuers and investors. Overall, the underwriters who are authorized risk-accessors primarily hold responsibility in the areas discussed below:

Challenges in the SEBI Underwriter Framework

Despite significant progress in regulating the underwriting process, the SEBI underwriter framework continues to face several challenges, as discussed below:

• Regulatory Overlap :- The existing overlap between regulations from SEBI, RBI, and financial authorities creates confusion and increases overall regulatory burden.
• Administrative Burden :- The requirement of additional formalities, such as registration, continuous reporting, and mandatory disclosure, increases administrative complexity.
• Methodological Divergence :- Wide variation in risk assessment approaches creates inconsistency in underwriting quality and commitment reliability across market participants.
• Disclosure Limitations :- Incomplete disclosure of underwriting risk assessment methodologies limits investors’ ability to evaluate underwriter quality and approach.
• Technology Gap :- Limited adoption of advanced technology and data analytics tools in the underwriting process hinders efficiency and accuracy in decision-making.
• Transparency Issue :- Lack of uniform reporting formats and disclosure practices sometimes reduces market transparency, making it difficult for investors to evaluate the credibility of underwriting activities.
• Risk-Pricing Alignment :- Ensuring appropriate alignment between underwriting risk and compensation remains challenging.
• Competition Corners :- The presence of dominant market players sometimes limits opportunities for smaller underwriters, leading to unequal competition and market concentration.

Penalties for Non-Compliance with SEBI Underwriters Regulations

Any non-compliance with the SEBI underwriters regulations attract several penalties, as discussed below:

• Monetary penalty for non-compliance with SEBI (Underwriters) Regulations, 1993
• Penalty for failure to meet reporting obligations
• Penalty for breach of any specific terms of agreement with the body corporate
• Disgorgement of profits earned through non-compliant or fraudulent activities
• Suspension or cancellation of registration of a registered underwriter
• Any other legal action or additional enforcement actions

Eligibility Criteria for Registration of Underwriters with SEBI

The eligibility criteria for the registration of underwriters with SEBI are discussed below:

Compliance Obligations for SEBI Registration of Underwriters

The following is the list of mandatory compliance obligations for SEBI registration of underwriters:

• Comply with the code of conduct specified under Schedule II of the Rules
• Enter into valid agreements with a corporate body on behalf of the underwriters
• Maintain records, books of accounts, balance sheet, profit and loss account, and auditor’s report
• Appoint a compliance officer for monitoring compliance under the Rules
• Comply with general responsibilities as specified under the Rules

Why Trust Enterslice for Registration of Underwriters with SEBI?

As a leading business consulting firm, Enterslice provides end-to-end assistance in obtaining underwriters registration with SEBI. Connect our team to ensure a seamless process from documentation to compliance and final approval. Here are some of the reasons why Enterslice is the best choice for the registration of underwriters with SEBI:

FAQs on SEBI Registration of Underwriters