Companies will have to pay commission to brokers for the submission of investors’ initial public offer (IPO) forms even if the public offer is withdrawn, and listings will not be allowed till the time this payment is made. In its guidelines for submission of IPO applications through a nationwide network of brokers, physically or electronically, market regulator Sebi has made provisions for payment of a commission to such brokers by the IPO-bound companies.
Once the broker accepts the application, he would be responsible for uploading the bid on the stock exchange platform and would be made liable for not uploading the bid even after accepting the application.
Sebi has asked the stock exchanges to take action against such brokers and in case of repeated offence, stringent action can be taken by the stock exchanges against those brokers.
