Wednesday, April 6, 2011

Merchant Bank

Merchant banking institutions offer various specialist services such as loan syndication, financial and management consultancy, project counseling, portfolio management, formulation of schemes for rehabilitation, guidance on foreign trade financing and management and advisory services to medium and small savers. Merchant banks are involved in underwriting of shares , issuance and management of shares, unit trust management. It gives advise on restructuring of capital, amalgamation mergers and acquisitions etc.
Merchant bankers Regulation 2064 has come into effect. The expectation from the introduction of this regulation act is it will help in better management of capital market. This regulation has defined four entities: (i) Issue Manager (ii) underwriter (iii) Share Registar and (iv) Portfolio Manager.
Issue manager manages issue of shares. Underwriter underwrites shares that are not sold and buys them. Registar keeps all the records of the shareholders and Portfolio Manager helps investors to manage their portfolio. Merchant bank must have separate license to operate as either one of the four or all of the four from their regulatory authority i.e Security Board of Nepal. Earlier, merchant banks were under dual regulation of NRB  and SEBON.

1 comment:

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