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Sebi mulls rules to tame erring merchant bankers

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Press Trust Of India

The Securities and Exchange Board of India (Sebi), is mulling over ways to rein in erring merchant bankers regarding overpricing of IPOs and hyping public issues through misleading advertisements and media reports outside the regulatory ambit. The regulator is actively considering bringing out soon a discussion paper on the matter, wherein it would seek public comments on draft regulations to curb the menace of overpricing and hyping public offers, sources close to the development said.

The issue is likely to be discussed in the Sebi board meeting scheduled for Monday and thereafter the regulator might soon issue the draft guidelines for public comments, sources said. They said Sebi could propose stringent actions against the erring bankers with regard to overpricing, unnecessary hype and violations of a standard code of conduct, which would be detailed out in the discussion paper, they added. The matter holds significance in the backdrop of Sebi warning the merchant bankers against creating a big hype in the case of the recently concluded IPO of Coal India.

 

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First Published: Oct 25 2010 | 12:35 AM IST

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