Central University

of South Bihar

SCHOOL OF LAW AND GOVERNANCE

P roject WorK

Topic– “Role of Intermediaries In Primary Market”.

SUBMITTED TO, SUBMITTED BY,

Dr. Pradip Kumar Das Amit Kumar

Assistant Professor BSc.LL.B (8th Sem).

School of Law and Governance, CUSB1513115005

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 ACKNOWLEDGEMENT

You are most welcome in my project work of “Financial Market Regulation” on the topic
“Role of Intermediaries in Primary Market”. This project is given by our honourable subject
professor “Dr. Pradip Kr. Das” and first of all I would like to thank him for providing me
such a nice topic and making me aware as well providing me a lot of ideas regarding the topic
and the methods to complete the project.

I would like to thank all the Library staffs who helped me to find all the desired books
regarding the topic as the whole project revolves around the doctrinal methodology of research.
I would like to thank to my seniors as well as class mates who helped me in the completion of
this project. I would also like to thanks to Google, Wikipedia, Indian Kanoon as well as other
websites over web which helped me in the completion of this project. Last but not the least; I
would like to thank all who directly or indirectly helped me in completing of this project.

I have made this project with great care and tried to put each and every necessary
information regarding the topic. So at the beginning I hope that if once you will come inside
this project you will be surely glad.

-Amit Kumar

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 CONTENTS

S . No T itle Page No.

01. Research Title…………………………………………..… 04

02. Research Methodology…………………………………… 04

03. Research Questions…………………………….……..….. 05

04. Hypothesis………………………….…………...………….. 06

05. Literature Review…….………..………………………… 07

06. Introduction………………………………………………... 08-09

7. Types/functions of Intermediaries in primary market ….. 11-17

8. Scope of work of intermediaries ………………………….. 17-21

9. Merits and demerits of intermediaries and conclusion…… 22

10. Bibliography………………………………………………… 23

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R ESEARCH TITLE

Effectiveness of Intermediaries In Primary Market: Merits And Demerit

R ESEARCH METHODOLOGY

This Research Work is basically based upon Doctrinal Method of research, based upon the
research through Primary sources including contemporary literature review, Books, Journals,
Digests and Secondary Sources including websites, online articles and the data collected from
World Wide Web and etc.

M ethod of Writing

The research paper is in theoretical in nature.

M ode of Citation

The mode of citation used in this paper is 19th edition of Harvard Blue Book Citation.

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R ESEARCH QUESTIONS

The research questions whose answers are sought to be found via this research project are as
follows-

1. Who are intermediaries of primary market?

2. Types of intermediaries in primary market and its function?

3. How intermediaries play an important role in development of primary market ?

4. What are the merits and demerits of primary market intermediaries ?

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H YPOTHESIS

The paper deals with the role of Intermediaries in Primary Market and also the comparative
study of case laws and outcome of the paper is to find out the merits and demerits and the
necessary suggestions by which role of intermediaries shall more fruitful for primary market
and for Indian economy .

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 L ITERATURE REVIEW

P rimary sources

1. M.Y. Khan, Indian Financial Systeam, Mc Graw hill Education.

2. E. Gorden and K. Natarajan, Financial market and Services, Himalaya publishing House

3. T.R. Venkatesh, Indian Financial Markets, ICFAI.

4. S.S. Saha, Indian Financial Systems and Markets, Mc Graw hill Education.

S econdary Sources

1. http://www.wikipedia.org

2. http://www.indiankanoon.com

3. http://www.manupatra.com

4. http://www.scconline.com

5. http://www.advocatekhoj.com

7
 Introduction

An entity that acts as the middle man between two parties in a financial transaction. While a
commercial bank is a typical financial intermediary, this category also includes other financial
institutions such as investment banks, insurance companies, broker-dealers, mutual funds and
pension funds. Financial intermediaries offer a number of benefits to the average consumer
including safety, liquidity and economies of scale. Financial intermediaries encompass a wide
range of entities in terms of size and scale of operation, ranging from a small insurance
brokerage, to giant global institutions that provide a complete range of financial services
including commercial banking, investment banking and asset management. In certain areas
such as investing, advances in technology threaten to eliminate the (financial) intermediary, a
phenomenon known as disintermediation. For example, the advent of online brokerages has
resulted in millions of active investors bypassing traditional full-service brokerages and
investing directly in the markets. Disintermediation is much less of a threat in other areas of
finance such as banking and insurance.

Meaning and Definition of Primary Market

A market that issues new securities on an exchange. Companies, governments and other
groups obtain financing through debt or equity based securities. Primary markets are
facilitated by underwriting groups, which consist of investment banks that will set a beginning
price range for a given security and then oversee its sale directly to investors. Also known as
"new issue market" (NIM). The primary markets are where investors can get first crack at a
new security issuance. The issuing company or group receives cash proceeds from the sale,
which is then used to fund operations or expand the business. Exchanges have varying levels

8
of requirements which must be met before a security can be sold. Once the initial sale is
complete, further trading is said to conduct on secondary market.

Function of Primary Market

The key function of the primary market is to facilitate capital growth by enabling individuals
to convert savings into investments. It facilitates companies to issue new stocks to raise
money directly from households for business expansion or to meet financial obligations. It
provides a channel for the government to raise funds from the public to finance public sector
projects. Unlike the secondary market, such as the stock market which trades listed shares
between buyers and sellers, the primary market exists for the issuance of new securities by
corporations and the government directly to investors1.

Types of Intermediaries in Primary Market

The following market intermediaries are involved in the primary market:

1. Merchant Bankers/Lead Managers

2. Registrars and Share Transfer Agents.

3. Underwriters

4. Bankers to issue.

5. Debenture Trustees.

Merchant Banker

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. In modern usage in the United States, the term additionally

1 www.wikipedia.com visited on 12/04/2019

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has taken on a more narrow meaning, and refers to a financial institution providing capital to
companies in the form of share ownership instead of loans. A merchant bank also provides
advisory on corporate matters to the firms in which they invest. 'Merchant Banker' means any
person engaged in the business of issue management by making arrangements regarding
selling buying or subscribing to securities or acting as manager/consultant/advisor or
rendering corporate advisory services in relation to such issue management.

Merchant Banker’s Activities

a) Managing of public issue of securities;

b) Underwriting connected with the aforesaid public issue management business;

c) Managing/Advising on international offerings of debt/equity i.e. GDR, ADR, bonds and

other instruments;

d) Private placement of securities;

e) Corporate advisory services related to securities market including takeovers, acquisition

and disinvestment; etc.

The activities of the merchant bankers in the Indian capital market are regulated by SEBI

(Merchant Bankers) Regulations,19922.

Registration of Merchant Banker

Regulation 3 of SEBI (Merchant Bankers) Regulations, 1992 lays down that an application by

a person desiring to become merchant banker shall be made to SEBI in the prescribed form

seeking grant of a certificate of registration along with a non-refundable application fee as

specified. Regulation 6 lists out the following considerations / conditions for being taken into
account by SEBI to grant the certificate of registration:

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 RBI Act, 1934;

2 http://shodhganga.inflibnet.ac.in/bitstream visited on 10/04/2019

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b) the applicant has the necessary infrastructure like adequate office space, equipment’s and
manpower to effectively discharge his activities;

c) the applicant has in his employment a minimum of two persons who have the experience to
conduct the business of the merchant banker;

d) The applicant fulfills the capital adequacy requirement, capital adequacy requirement shall
be a net worth of not less than 5 crore rupees. 'Net worth' means the sum of paid-up capital
and free reserves of the applicant at the time of making application.

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 offence;

g) the applicant has the professional qualification from an institution recognized by the
Government in finance, law or business management;

h) the applicant is a fit and proper person;

i) grant of certificate to the applicant is in the interest of investors

Regulation 12 provides for payment of fees and consequences of failure to pay annual fees. It
provides that SEBI may suspend the registration certificate if merchant banker fails to pay
fees. Regulation 3 of SEBI (Merchant Bankers) Regulations, 19923 lays down that an
application by a person desiring to become merchant banker shall be made to SEBI in the
prescribed form seeking grant of a certificate of registration along with a non-refundable
application fee as specified. Regulation 6 lists out the following considerations / conditions for
being taken into account by SEBI to grant the certificate of registration. Regulation 12
provides for payment of fees and consequences of failure to pay annual fees.

GENERAL OBLIGATIONS AND RESPONSIBILITIES OF MERCHANT BANKER

(CODE OF CONDUCT)

3 SEBI (Merchant Bankers) Regulations, 1992

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Regulation 13 stipulates that every merchant banker shall abide by the code of conduct. The
code of conduct as provided in the revised schedule is as under A merchant banker :

a) Should make All efforts to protect the interests of investors

b) Should maintain high standards of integrity, dignity and fairness in the conduct of its
business.

c) Should Fulfill its obligations in a prompt, ethical, and professional manner.

d) Shall at all times exercise due diligence, ensure proper care and exercise independent
professional judgment.

e) Shall ensure that the inquiries from investors and their complaints are properly redressed in
an appropriate manner. Where a complaint is not remedied promptly, the investor is advised of
any further steps which may be available to the investor under the regulatory system.

f) Shall avoid conflict of interest and make adequate disclosure of its interest.

g) Shall not indulge in any unfair competition, such as weaning away the clients on

assurance of higher premium

h) Shall maintain arm’s length relationship between its merchant banking activity and any

other activity.

LEAD MERCHANT BANKER/LEAD MANAGER

Regulation 18 lays down that all public issues should be managed by at least one merchant
banker functioning as the lead merchant banker. Every lead merchant banker shall, before
taking up the assignment relating to an issue, enter into an agreement with the issuing
company setting out their mutual rights, liabilities and obligations relating to such issue and in
particular to disclosures, allotment and refund4.

RESPONSIBILITIES OF LEAD MANAGERS

4 S.S. Saha, Indian Financial Systems and Markets, Mc Graw hill Education
12
Regulation 20 provides that no lead manager shall agree to manage or be associated with any
issue unless his responsibilities relating to the issue mainly those of disclosures, allotment and
refund are clearly defined, allocated and determined and a statement specifying such
responsibilities is furnished to SEBI at least 1 month before the opening of the issue for
subscription but where there are more than 1 lead merchant banker to the issue the
responsibility of each such lead merchant banker shall clearly be demarcated and the
statement specifying such responsibilities shall be furnished to SEBI at least 1 month before
the opening of the issue for subscription. No lead merchant banker shall agree to manage the
issue made by anybody corporate if such body corporate is an associate of the lead merchant
banker5.

Regulation 21 stipulates that a lead merchant banker shall not associate himself withany issue
if a merchant banker not holding a certificate from SEBI is associated with the issue.

MINIMUM UNDERWRITING OBLIGATION

Regulation 22The lead merchant banker shall accept a minimum underwriting obligation of
5% of the total underwriting commitment or Rs. 25 lakhs whichever is less. But if the lead
merchant banker is unable to accept the minimum underwriting obligation, that lead merchant
banker shall make arrangement for having the issue underwritten to that extent by a merchant
banker associated with the issue and shall keep SEBI informed of such arrangement.
Merchant banker shall itself or jointly with other merchant bankers associated with the issues,
underwrite at least 15% of the issue size.

PROHIBITION TO ACQUIRE SHARES

Regulation 26 lays down that no merchant banker or any of its directors, partners or manager
or principal officer shall either on their own account or through their associates or relatives,
enter into any transaction in securities of bodies corporate on the basis of unpublished price
sensitive information obtained by them during the course of any professional assignment
either from the clients or otherwise6.

Regulation 27 requires every merchant banker to submit to SEBI complete particulars of any
transaction for acquisition of securities of anybody corporate whose issue is being managed by
that merchant banker, within 15 days from the date of entering into such transaction.
Regulation 28A requires every merchant banker to appoint a compliance officer who shall be

5
6
13
responsible for monitoring the compliance of the Act, rules and regulations issued by SEBI or
Central Government and for redressed of investor grievances. Compliance officer is required
to immediately and independently report to SEBI, any non compliance observed by him and
ensure that observations made or deficiencies pointed out by SEBI on/in the draft prospectus
or letter of offer as the case may be, do not occur7.

PROCEDURE FOR ACTION AGAINST MERCHANT BANKER IN CASE OF

DEFAULT

Regulation 35 provides that a merchant banker who:

(a) fails to comply with any conditions subject to which certificate has been granted and

(b) contravenes any of the provisions of the Act, rules or regulations. He shall be dealt in the
manner provided under SEBI (Procedure for Holding Enquiry by Enquiry Officer and
Imposing Penalty) Regulations, 2002.

REGISTRARS AND SHARE TRANSFER AGENTS

REGISTERAR

'Registrar to an Issue' means the person appointed by a body corporate or any person or

group of persons to carry on the following activities on its or his or their behalf i.e.

a) collecting application for investor in respect of an issue

b) keeping a proper record of applications and monies received from investors or paid to the
seller of the securities

c) assisting body corporate or person or group of persons in determining the basis of allotment
of the securities in consultation with the stock exchange8

d) finalize the list of person entitled to allotment of securities

7 http://www.moneycrashers.com visited on 10/10/2019

8 M.Y. Khan, Indian Financial Systeam, Mc Graw hill Education.

14
e) Processing and dispatchment of allotment letters, refund orders or certificates and other
related documents in respect of the issue.

SHARE TRANSFER AGENT

'Share Transfer Agent' means:

a) any person who on behalf of anybody corporate, maintains the records of holders of
securities issued by such body corporate and deals with all matters connected with the transfer
and redemption of its securities

b) The department or division, by whatever name called, of a body corporate performing the
activities as share transfer agents if at any time the total number of holders of its securities
issued exceed 1 lac. The activities of the RTAs in the Indian capital market are regulated by
SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, 1993.

REGISTRARS AND SHARE TRANSFER AGENTS – REGISTRATION

SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 lays down that an

application by a person desiring to become RTA shall be made to SEBI in the prescribed form

seeking grant of a certificate of registration along with a non-refundable application fee as

specified, Regulation 6 lays down that SEBI shall take into account the following matters
while considering the applications for registration. It shall assess whether the applicant:

a) has the necessary infrastructure like adequate office space, equipments and manpower to
effectively discharge his activities

b) has any past experience in the activities

c) any person directly or indirectly connected with him has been granted registration

by SEBI under the Act

d) Fulfills the capital adequacy requirement

e) has been subjected to any disciplinary proceedings under the Act;

15
f) any of its director, partner or principal officer is or has at any time been convicted for any
offence involving moral turpitude or has been found guilty of any economic offence

g) Is a fit and proper person.

GENERAL OBLIGATIONS AND RESPONSIBILITIES

Regulation 13A prohibits an RTA from acting as such Registrar in case he or it is an associate

of the body corporate issuing the securities. For the purposes of this regulation, Registrar to

an Issue or the body corporate, as the case may be, shall be deemed to be an associate of

other where:

a. He or it controls directly or indirectly not less than 10% of the voting power of the body
corporate or of Registrar to an issue, as the case may be or

b. He or any of his relative is a director of the body corporate or of the Registrar to an issue, as
the case may be.

The term 'relative' shall have the same meaning as assigned to it under Section 6 of the
Companies Act, 2013.

Regulation 15A provides that every Registrar to an Issue and share transfer agent shall

appoint a compliance officer who shall be responsible for monitoring the compliance of the
Act, rules and regulations, notifications, guidelines, instructions etc. issued by SEBI or Central
Government and for redressed of investor grievances.

LIABILITY FOR ACTION IN CASE OF DEFAULT

A registrar to an Issue who:

• fails to comply with any conditions subject to which registration has been granted

• Contravenes any of the provisions of the Act, rules or regulations.

• Contravenes the provisions of the SCRA and the rules made there under, provisions of the
Depositories Act or rules made there under, the rules, regulations or bye laws of the stock
exchange, shall be dealt with in the manner provided under SEBI (Procedure for holding
enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002.

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UNDERWRITERS

'Underwriter' means a person who engages in the business of underwriting of an issue of

securities of a body corporate 'Underwriting' means an agreement with or without conditions

to subscribe to the securities of a body corporate when the existing shareholders of such body
corporate or the public do not subscribe to the securities offered to them. The activities of the
Underwriters in the Indian capital market are regulated by SEBI (Underwriters) Regulations,
1993

UNDERWRITERS - REGISTRATION

Regulation 6 prescribes the following conditions for consideration of the application:

a) The applicant shall have necessary infrastructure like adequate office space, equipments and
manpower and past experience in underwriting, employing at least two persons with such
experience.

b) No person directly or indirectly connected with the applicant should have been granted
registration by SEBI.

c) SEBI shall take into account whether a previous application for a certificate of any person
directly or indirectly connected with the applicant has been rejected by SEBI or any
disciplinary action has been taken against such person under the Act or any rules/regulations.

d) the applicant should be a fit and proper person, The applicants fulfill the capital adequacy
requirements (The Net-worth should not be less than Rs 20 lac)

e) No director, partner or principal officer should have been at any time convicted for an
offence involving moral turpitude or found guilty of any economic offence.

OBLIGATIONS AND RESPONSIBILITIES OF UNDERWRITERS

Chapter III consisting of Regulation 13 to 18 deals with these matters Every underwriter

shall abide by the following code of conduct:

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a) The contents of the agreement shall include the period of agreement, the amount of
underwriting obligations, the period by which the underwriter should subscribe, the amount of
commission / brokerage payable, and other details for fulfilling the underwriting obligations9.

b) The underwriter shall not derive any direct or indirect benefit from underwriting the issue
other than the commission or brokerage payable under an agreement for underwriting.

c) The total underwriting obligations under all the agreements shall not exceed 20 times the
Net-worth.

d) Every underwriter, in the event of being called upon to subscribe for securities of a

body corporate pursuant to an agreement shall subscribe to such securities within 45

days of the receipt of such intimation from such body corporate.

Regulation 17A requires every underwriter to appoint a compliance officer responsible for
monitoring the compliance of the Act, rules and regulations, notifications, guidelines
instructions etc. issued by SEBI or the Central Government and for redressed of investors'
grievances.

LIABILITY FOR ACTION IN CASE OF DEFAULT10

An Underwriter who:

(a) fails to comply with any conditions subject to which registration has been granted

(b) Contravenes any of the provisions of the Act, rules or regulations. Shall be dealt with in
the manner provided under SEBI (Procedure for holding enquiry by Enquiry Officer and
Imposing Penalty) Regulations, 2002.

BANKERS TO AN ISSUE

Banker to an Issue means a scheduled bank carrying on all or any of the following activities:

a) Acceptance of application and application monies

b) Acceptance of allotment or call monies

9 .T.R. Venkatesh, Indian Financial Markets, ICFAI.

10 SEBI (Procedure for holding enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002
18
c) Refund of application monies

d) Payment of dividend or interest warrants.

The activities of the Banker to an issue in the Indian capital market are regulated by SEBI
(Bankers to an Issue) Regulations, 1994.

BANKERS TO AN ISSUE - REGISTRATION

Regulation 6 prescribes the matters that are considered by SEBI in relation to the application:

a) the applicant has the necessary infrastructure, communication and data processing facilities
and manpower to effectively discharge his activities;

b) the applicant or any of its directors is not involved in any litigation connected with the
securities market and which has an adverse bearing on the business of the applicant or has not
been convicted of any economic offence;

c) the applicant is a scheduled bank and a fit and a proper person;

d) the applicant is a fit and proper person;

e) grant of certificate to the applicant is in the interest of investors

GENERAL OBLIGATIONS AND RESPONSIBILITIES

Regulation 12 requires every banker to an issue to maintain the following records:

a) the number of applications received, the names of the investors, the dates on which the
applications were received and the amounts so received from the investors

b) the time within which the applications received from the investors were forwarded to the
body corporate or registrar to an issue as the case may be

c) the dates and amount of the refund monies paid to the investors

d) dates, names and amount of dividend/interest warrant paid to the investors

e) The Banker to an issue shall intimate SEBI about the place where these documents are kept
and shall preserve them for a minimum period of 3 years

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Regulation 14 requires the banker to enter into an agreement with the body corporate for

which he is the banker to an issue with regard to the following matters:

a) the number of centers at which the application and the application monies of an issue of a
body corporate will be collected from the investors;

b) the time within which the statements regarding the applications and the application monies
received from the investors investing in an issue of a body corporate will be forwarded to the
registrar to an issue of the body corporate, as the case may be;

c) The daily statement will be sent by the designated controlling branch of the bankers to the
issue to the registrar to an issue indicating the number of body corporate and the amount of
application money received.

Regulation 15 requires the banker to inform SEBI about disciplinary action taken, if any by
the RBI against him in relation to issue payment work. If as a result of such action the banker
is prohibited from carrying on the activities, the certificate shall be deemed to have been
cancelled or suspended as the case may be.

Regulation 16 prescribes that every banker to an issue shall abide by the Code of Conduct as
specified in Schedule III of the Regulations. Regulation 16A provides that every banker to an
issue is required to appoint a compliance officer responsible for monitoring the compliance of
the Act, rules and regulations, notifications, guidelines, instructions etc. issued by SEBI or
Central Government. He shall also be entrusted with the responsibility of redressal of
investors' grievances. He is required to immediately and independently report to SEBI
regarding any non-compliance observed by him.

ACTION IN CASE OF DEFAULT

A Banker to an issue who:

(a) fails to comply with any conditions subject to which registration has been granted

(b) Contravenes any of the provisions of the Act, rules or regulations.

Shall be dealt with in the manner provided under SEBI (Procedure for holding enquiry by
Enquiry Officer and Imposing Penalty) Regulations, 2002

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DEBENTURE TRUSTEES

'Debenture Trustee' means a trustee of a trust deed for securing any issue of debentures

of a body corporate. 'Debenture' means a debenture as defined in Section 2(12) 11 of

Companies Act, 2013. Trust Deed' means a deed executed by the body corporate in favour of
the trustee named therein for the benefit of the debenture holders.The activities of Debenture
Trustee in the Indian capital market are regulated by SEBI (Debenture Trustees) Regulations,
1993

DUTIES OF DEBENTURE TRUSTEES

Regulation 15 casts the following duties on the debenture trustees:

a) call for periodical reports from the body corporate

b) take possession of trust property in accordance with the provisions of the trust deed

c) enforce security in the interest of the debenture holders

d) do such acts as necessary in the event the security becomes enforceable

e) carry out such acts as are necessary for the protection of the debenture holders and

to do all things necessary in order to resolve the grievances of the debenture

holders

f) ascertain and specify that:

g) in case where the allotment letter has been issued and debenture certificate is to be issued
after registration of charge, the debenture certificates have been dispatched by the body
corporate to the debenture holders within 30 days of the registration of the charge with ROC

h) debenture certificates have been dispatched to the debenture holders in accordance with the
provisions of the Companies Act

i) interest warrants for interest due on the debentures have been dispatched to the

11 SEBI (Debenture Trustees) Regulations, 1993

21
debenture holders on or before the due dates

j) Debenture holders have been paid the monies due to them on the date of

redemption of the debentures

k) ensure on a continuous basis that the property charged to the debenture is available and
adequate at all time to discharge the interest and principal amounts payable in respect of the
debentures and that such property is free from any other encumbrances save and except those
which are specifically agreed to by the debenture trustee.

l) exercise due diligence to ensure compliance by the body corporate, with the provisions of
the Companies Act, the listing agreement of the stock exchange or the trust deed

Regulation 16 requires that every debenture trustee shall abide by the code of conduct as

specified in Schedule III to the Regulations. Every debenture trustee is required to appoint a
compliance officer responsible for monitoring the compliance of the Act, rules and
regulations, notifications, guidelines, instructions etc. issued by SEBI or Central
Government12.

ACTION IN CASE OF DEFAULT

A debenture trustee who, fails to comply with any conditions subject to which registration has
been granted Contravenes any of the provisions of the Act, rules or regulations. Shall be dealt
with in the manner provided under SEBI (Procedure for holding enquiry by Enquiry Officer
and Imposing Penalty) Regulations, 2002

CONCLUSION

Finally we can see the function of the different intermediaries which makes our financial
market much stronger and further we can observe that, SEBI is acting as regulator for all such
intermediaries that is why it is not very simple for intermediaries to mislead the market
because they will not be able to renew his license and also shall be liable to penalty. Further it
is very difficult to pick the demerit of the role of intermediaries, but yes merit is that its act as
bridge between investors and company and at the same time these intermediaries decrease
12 E. Gorden and K. Natarajan, Financial market and Services, Himalaya publishing House
22
unnecessary burden to maintaining different accounts and other relevant documents. Further
company have not to pay a large amount to float the shares in primary market by keeping
expert in his own company. Intermediaries having much expertise in such matter.

BIBLIOGRAPHY

1. M.Y. Khan, Indian Financial Systeam, Mc Graw hill Education.

2. E. Gorden and K. Natarajan, Financial market and Services, Himalaya publishing House

3. T.R. Venkatesh, Indian Financial Markets, ICFAI.

4. S.S. Saha, Indian Financial Systems and Markets, Mc Graw hill Education.

WEBSITES

1. http://www.wikipedia.org

2. http://www.indiankanoon.com
23
3. http://www.manupatra.com

4. http://www.scconline.com

5. http://www.advocatekhoj.com

24