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SEBI Merchant Bankers Regulations: FOCL Barred for Two Years

25 October 20251 min read
BANKING & FINANCESEBI MerchantBankers Regulations:FOCL Barred for TwoYears25 October 2025safalsetu.com

Why in the news

SEBI penalised First Overseas Capital Ltd (FOCL) for several violations, signalling tougher focus on accountability, financial soundness and disclosure by merchant bankers.

Key facts

  • Action: no new issue-management mandates (IPOs included), advisory work, or acting as manager or lead underwriter for two years.
  • Penalty: ₹20 lakh.

About the regulations

  • SEBI (Merchant Bankers) Regulations, 1992 regulate capital-market intermediation for transparency and investor protection.
  • Merchant banker: anyone in issue management, arranging purchase, sale or subscription of securities, or acting as manager, consultant or adviser to an issue.
  • Covers public issues (IPO/FPO), underwriting, restructuring advice, portfolio and project finance advice.
ProvisionReferenceCore requirement
RegistrationReg. 3-6Prior SEBI registration; infrastructure, staff, financial soundness
Capital adequacy–Net worth at least ₹5 crore (paid-up capital plus free reserves, excluding revaluation reserves)
Code of conductSchedule IIIIntegrity, fairness, no conflicts, full disclosure, confidentiality
Underwriting and issue managementReg. 13-16Agreement with issuer, due diligence, due diligence certificate before issue opens
RecordsReg. 29Keep for a minimum of 5 years
ReportsReg. 32Half-yearly reports to SEBI
Non-securities businessReg. 24(b)Barred from unrelated business such as real estate or trade

Exam angle

  • Year of regulations: 1992; regulator: SEBI.
  • Net worth floor: ₹5 crore; record retention: 5 years.

Test yourself

1. SEBI barred which merchant banker from taking new mandates for two years?

The notes name First Overseas Capital Ltd (FOCL).

2. What is the minimum net worth for merchant bankers, per the notes on the latest amendment?

The notes state a minimum net worth of ₹5 crore.

3. For how long must merchant bankers keep books, agreements and records under Reg. 29?

Reg. 29 requires keeping records for a minimum of 5 years.