An entity registered as a stock broker only cannot operate as a merchant banker in the capital markets, the Securities and Exchange Board of India (SEBI) said here.
Rsponding to a clarification sought by stock broker Almondz Global Securities Ltd. (AGSL), the market regulator clarified that although it was also registered as a merchant banker, the company was barred in March from taking up fresh assignments as a merchant banker for a period of five years.
The regulator prohibited AGSL from taking up new assignments or involvement in any new issue like an IPO or follow-on issue from the securities market for five years in the matter of PG Electroplast Ltd.
Later in April, SEBI also suspended AGSL as a merchant banker for six months in the matter of Bhartiya Global Infomedia.
"In the present case, the activities specified by AGSL are in the nature of activities carried out by a merchant banker, therefore, AGSL (stock broker) cannot perform such activities", SEBI said in an "interpretive letter" to AGSL, published Monday.
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