General Obligations and Responsibilities
Code of Conduct for Underwriters
An underwriter should:
1. Make
all efforts to protect the interests of its clients.
2. Maintain
high standards of integrity, dignity and fairness in the conduct of its
business.
3.
Ensure that it and its personnel will
act in an ethical manner in all its dealings with a body corporate making an
issue of securities (i.e. the issuer).
4.
Endeavour to ensure all professional
dealings are affected in a prompt, efficient and effective manner.
5.
At all times render high standards of
service, exercise due diligence, ensure proper care and exercise independent
professional judgment.
6.
Not make any statement, either oral or
written, which would misrepresent (a) the services that the underwriter is
capable of performing for its client, or has rendered to any other issuer
company; (b) his underwriting commitment.
7. Avoid
conflict of interest and make adequate disclosure of his interest.
8.
Put in place a mechanism to resolve any
conflict of interest situation that may arise in the conduct of its business or
where any conflict of interest arises, should take reasonable steps to resolve
the same in any equitable manner.
9.
Make appropriate disclosure to the
client of its possible source or potential in areas of conflict of duties and
interest while acting as underwriter which would impair its ability to render
fair, objective and unbiased services.
10.Not
divulge to other issuer, press or any party any confidential information about
its issuer company, which has come to its knowledge and deal in securities of
any issuer company without making disclosure to the SEBI as required under
these regulations and also to the Board directors of the issuer company.
11.
Not discriminate amongst its clients,
save and except on ethical and commercial considerations. 12. Ensure that any
charge in registration status/any penal action taken by SEBI or any material
change in financials which may adversely affect the interests of clients/
investors is promptly informed to the clients and any business remaining
outstanding is transferred to another registered person in accordance with any
instructions of the affected clients/investors.
13.Maintain
an appropriate level of knowledge and competency and abide by the provisions of
the SEBI Act, regulations, circulars and guidelines issued by the SEBI. The
underwriter should also comply with the award of the Ombudsman under the SEBI
(Ombudsman) Regulations, 2003.
14.Ensure
that the SEBI is promptly informed about any action, legal proceedings, etc.
initiated against it in respect of any material breach or non-compliance by it,
of any law, rules, regulations, and directions of the SEBI or of any other
regulatory body.
15.
Not make any untrue statement or
suppress any material fact in any documents, reports, papers or information
furnished to the SEBI.
(a) Not render,
directly or indirectly any investment advice about any security in the publicly
accessible media, whether real-time or non-real-time, unless a disclosure of
his interest including its long or short position in the security has been
made, while rendering such advice; (b) In case an employee or an underwriter is
rendering such advice, the underwriter should ensure that he should disclose
his interest, the interest of his dependent family members and that of the
employer including their long or short position in the security, while
rendering such advice.
17.
Not either through its account or their
respective accounts or through their associates or family members, relatives or
friends indulges in any insider trading.
18.Not
indulge in any unfair competition, which is likely to be harmful to the
interest of other underwriters carrying on the business of underwriting or
likely to place such other underwriters in a disadvantageous position in
relation to the underwriter while competing for, or carrying out any
assignment.
19.
Have internal control procedures and
financial and operational capabilities which can be reasonably expected to
protect its operations, its clients and other registered entities from
financial loss arising from theft, fraud, and other dishonest acts,
professional misconduct or commissions.
20.
Provide adequate freedom and powers to
its compliance officer for the effective discharge of his duties.
21.
Develop its own internal code of conduct
for governing its internal operations and laying down its standards of
appropriate conduct for its employees and officers in the carrying out of their
duties. Such a code may extend to the maintenance of professional excellence
and standards, integrity, confidentiality, objectivity, avoidance of conflict
of interest, disclosure of shareholdings and interests, etc.
22.
Ensure that good corporate policies and
corporate governance is in place.
23.
Ensure that any person it employs or
appoints to conduct business is fit and proper and otherwise qualified to act
in the capacity so employed or appointed (including having relevant
professional training or experience).
24.
Ensure that it has adequate resources to
supervise diligently and does supervise diligently persons employed or
appointed by it to conduct business on its behalf.
25.
Be responsible for the acts or omissions
of its employees and agents in respect to the conduct of its business.
26.Ensure
that the senior management, particularly decision makers have access to all
relevant information about the business on a timely basis.
16. Not be party to or instrumental for (a) certain of false market, (b) price rigging or manipulation, or; (c) passing of unpublished price sensitive information in respect of securities which are listed and proposed to be listed in any stock exchange to any person or intermediary.
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