Issue Market Intermediaries

 

Meaning of Issue Management

               Issue management refers to the process of raising capital by companies through the issue of securities (shares, debentures, bonds, etc.) to the public. Since companies cannot directly approach the public, they need intermediaries registered with SEBI to manage and facilitate this process.

Who are Issue Management Intermediaries?

Issue management intermediaries are specialized institutions/agents authorized by SEBI to assist companies in the process of issuing securities and ensure compliance with legal, procedural, and regulatory requirements.

Importance of Issue Management Intermediaries

• Ensure transparency and fairness in capital markets.

• Protect investor interests.

• Reduce risks for issuing companies.

• Speed up the process of fund raising.

• Build trust between companies and the public.

Meaning of Merchant Bankers

• A Merchant Banker is a financial intermediary who helps companies in raising funds from the capital market.

• In India, they are also called Lead Managers when they manage public issues.

• They are regulated by SEBI (Merchant Bankers) Regulations, 1992.

Functions of Merchant Bankers

1. Issue Management

   • Act as Lead Manager in public issues (IPO, FPO).

   • Draft prospectus and get SEBI approval.

   • Coordinate with underwriters, bankers, registrars, and stock exchanges.

2. Underwriting of Securities

   • They may underwrite issues themselves or arrange underwriters.

3. Corporate Advisory Services

   • Advise companies on raising funds, mergers & acquisitions, restructuring, joint ventures, etc.

4. Due Diligence

   • Verify company’s legal, financial, and operational details before public issue.

   • Ensure transparency for investors.

5. Marketing of Securities

   • Prepare roadshows, advertisements, investor presentations.

   • Create awareness and confidence among potential investors.

6. Compliance & Regulatory Role

   • Ensure company complies with SEBI guidelines, Companies Act, Stock Exchange listing requirements.

 Categories of Merchant Bankers (as per SEBI)

1. Category I

   • Can act as issue manager, advisor, underwriter, and portfolio manager.

   • Must have a minimum net worth of ₹5 crore.

2. Category II

   • Can act as co-managers, advisors, underwriters, and portfolio managers.

   • Net worth requirement: ₹50 lakh.

3. Category III

   • Can act as underwriters, advisors, and portfolio managers only.

   • Net worth requirement: ₹20 lakh.

4. Category IV

   • Only act as advisors/consultants to an issue.

   • No net worth requirement.

 Importance of Merchant Bankers

• Provide professional expertise in issue management.

• Build confidence among investors.

• Help companies raise funds quickly and legally.

• Protect the interests of investors through due diligence.

• Act as a bridge between companies and capital markets.

Merchant Bankers are SEBI-registered financial intermediaries who manage and advise companies in raising capital from the market, ensuring smooth, transparent, and legal issue management.

Underwriters

• An Underwriter is a financial intermediary who undertakes the risk of subscribing to the unsubscribed portion of securities in a public issue.

• In simple terms:

  If the public does not buy all the shares/debentures issued, the underwriter agrees to buy the remaining.

• They provide a guarantee of full subscription to the issuing company.

Role of Underwriters in Issue Management

1. Risk Bearing

   • Protect companies from the risk of under-subscription.

   • Assure the company that funds will be raised.

2. Confidence Building

   • Their presence gives confidence to investors, stock exchanges, and regulators.

3. Market Support

   • They help stabilize the market for new securities.

4. Advisory Role

   • Sometimes they advise on pricing and timing of the issue.

Types of Underwriting

1. Firm Underwriting

   • Underwriter agrees to definitely take up a certain number of securities, whether or not they are subscribed by the public.

2. Sub-Underwriting

   • Main underwriter passes a part of the responsibility to sub-underwriters (like brokers).

3. Syndicate Underwriting

   • A group (syndicate) of underwriters jointly underwrites a large issue to spread risk.

Legal/Regulatory Framework (India – SEBI)

• Underwriters must be registered with SEBI.

• SEBI (Underwriters) Regulations, 1993 govern them.

• Net worth requirement: ₹20 lakhs minimum.

• Agreement between underwriter and issuing company must be in writing.

Benefits of Underwriters

• For Issuing Company → Assures raising of required capital.

• For Investors → Boosts trust, as underwriters’ involvement signals confidence in the issue.

• For Capital Market → Ensures stability and successful mobilization of savings.

Underwriters guarantee full subscription of securities by agreeing to buy any portion not taken up by the public, thus reducing risk for the issuing company and instilling investor confidence.

Banker to the Issue

    A Banker to the Issue (also called a collecting banker) is the bank appointed by an issuing company to collect subscription monies from investors for a public issue (IPO/FPO/right issue/issue of debentures), hold those monies safely, assist in verification/reconciliation and facilitate refunds and transfer of proceeds to the issuer after allotment.

They act as a fiduciary/agent for the issuer during the money-collection phase and must follow procedures to protect investor funds and ensure proper accounting.

2) Appointment & eligibility

• Appointment is by written agreement between the company (or lead managers) and the bank.

• Typically a scheduled bank with adequate branch network and technology capability is chosen.

• The bank should have experience in public issues and (today) ASBA/SCSB capability for demat/online processing.

• Agreement usually spells out scope (collecting, refunding, escrow), fees, indemnities, and timelines.

3) Types / arrangements

• Sole Banker to the Issue — one bank handles all collections and refunds.

• Syndicate of Collecting Banks — collection responsibility spread across multiple banks (common for very large issues).

• Refund Bank — sometimes a different bank is appointed specifically to process refunds.

• ASBA / SCSB Bank — banks acting as Self-Certified Syndicate Banks block funds in investors’ accounts (explained below).

4) Detailed responsibilities — step by step

A. Pre-issue (setup and readiness)

• Open designated bank accounts / escrow accounts for the issue.

• Supply and distribute application forms, counterfoils, deposit slips and physical collection stationery to branches/collection centres (or set up online portals).

• Ensure branch network and staff trained on process, timelines, KYC and anti-money laundering checks.

• Coordinate with Lead Manager / Registrar / RTA / Underwriters on collection points, timelines and reconciliation format.

• If ASBA is used, ensure bank is registered as an SCSB with depositories (so it can block funds in investor accounts).

B. During the issue (collection & interim handling)

• Receive applications and subscription monies at designated branches / online channels.

• Issue acknowledgement receipts to applicants (physical or electronic).

• For ASBA: block the application amount in the investor’s account (do not debit), and unblock/transfer only after allotment instructions.

• For non-ASBA: collect cheques/DDs, credit to issue account but subject to clearance/final reconciliation.

• Daily reconciliation of applications received branch-wise and consolidated reporting to Lead Manager / Registrar.

• Handle cancellation requests, duplicate applications, incomplete forms (route back to applicant / lead manager as per timelines).

• Maintain strict segregation of funds — funds must be identifiable and protected; often held in escrow with clear release conditions.

C. Post-issue (allotment, refunds, transfer)

• Upon allotment instructions from Registrar/Lead Manager: transfer proceeds to issuer’s account net of refunds/underwriting amounts (as per agreement).

• Process refunds quickly for unsuccessful or partially allotted applications (refund by NEFT/cheque/electronic mode as agreed). Timeliness is critical — many regulations impose timelines or interest for delayed refunds.

• Provide banker’s certificates / reconciliation statements to the issuer / auditors showing collections, refunds, fees and final remittance.

• Retain records for audit and regulatory inspection.

5) Modern role — ASBA, demat and online collections

• ASBA (Application Supported by Blocked Amount) changed the collection landscape: the bank acting as an SCSB blocks money in the investor’s savings account instead of transferring it to the issuer. Funds remain with the bank until allotment; only then are amounts debited and transferred. This reduces refund work and systemic risk.

• Today, banker-to-the-issue must support demat application flows, net-banking IPO application interfaces, secure APIs for Registrar integration, and real-time reporting. Technology/IT reliability is a key selection criterion now.

6) Compliance, liabilities & safeguards

• The banker has a fiduciary duty: improper handling of funds (misapplication, late refunds, commingling) can expose the bank to legal/regulatory action and indemnity claims.

• Typical safeguards in the banker agreement: indemnity clauses, bank guarantees, limits on liability, and termination rights.

• Banks must follow KYC/AML norms on applications and collection.

• Prompt reconciliation, reconciled returns to Lead Manager/RTA and well-documented audit trails reduce disputes.

7) Records & documents to be maintained

• Branch-wise collection registers, consolidated collection statement.

• Copies/records of all application forms and receipts (electronic or physical).

• Daily reconciliation statements sent to Registrar / Lead Manager.

• Bankers’ certificates, refund payment advices, instruction memos.

• Audit trail for ASBA blocks/unblocks.

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8) Banker to the Issue vs. Banker to the Company vs. Registrar — quick comparison

• Banker to the Issue: collects application monies, holds in escrow, manages refunds and reconciliation during issue period.

• Banker to the Company: the issuer’s regular banker — handles the company’s regular operating accounts (separate role).

• Registrar to the Issue / RTA: maintains share/allotment records, processes allotment, coordinates with depositories; works closely with the banker to the issue but does not collect money (usually).

9) Practical checklist for a company choosing a Banker to the Issue

1. Strong branch/collection network matching target investor geography.

2. Proven ASBA / SCSB / net-banking capability and uptime.

3. Experience in similar sized issues and references.

4. Efficient reconciliation and reporting processes (daily reports, portal access).

5. Competitive and transparent fee structure and settlement timelines.

6. Robust controls, indemnities and insurance for operational risks.

7. Quick turnaround for refunds and strong dispute handling process.

10) Common problems & remedies

• Delayed refunds → agree contractual SLAs, include interest/penalty for delays.

• Reconciliation mismatches → daily branch-wise reconciliation, electronic uploads of application images.

• Duplicate/invalid applications → robust document verification & clear escalation matrix to lead manager.

• IT failure for online collections → failover arrangements, clear contingency plan in agreement.

11) Short sample clause (template wording — adapt with legal counsel)

Appointment & Scope. The Company appoints [Bank Name] as Banker to the Issue for the public issue of [details]. [Bank Name] shall provide collection, reconciliation, and refund services, maintain designated escrow/issue accounts, block/unblock funds for ASBA applications (if applicable), and provide daily consolidated collection reports to the Lead Manager/Registrar. The Bank shall perform duties in accordance with applicable law and the terms of this Agreement. The Bank shall be entitled to fees as agreed and shall be indemnified by the Company for liabilities arising out of acts performed in good faith under this Agreement.

(This is a high-level sample — get a lawyer to draft the actual legal text.)

12) Quick end-to-end process flow (compact)

1. Issue opens → collecting bankers accept applications (physical/online/ASBA).

2. Bank issues receipts and blocks/credits funds to issue account.

3. Daily reconciliation sent to Lead Manager/Registrar.

4. Issue closes → registrar finalizes allotment.

5. Registrar instructs bankers → bankers transfer allotted proceeds to issuer and refund rest.

6. Bank issues final reconciliation and banker’s certificate.

Brokers to an Issue

A Broker to an Issue is a SEBI-registered stockbroker appointed by the issuing company (through lead managers/merchant bankers) to help market and sell new securities (shares, debentures, etc.) to the public. In simple words, they act as agents between the company and investors, encouraging investors to subscribe to the issue.

2) Role of Brokers in Issue Management

Brokers do not handle money like bankers, nor guarantee subscriptions like underwriters. Instead, their role is distribution and mobilization of investors.

Key functions:

1. Marketing and Canvassing

   • Persuade their clients (retail, HNI, institutional) to invest in the new issue.

   • Spread awareness about the issue through roadshows, meetings, and presentations.

2. Assisting in Application Process

   • Guide investors in filling up application forms correctly.

   • Submit applications on behalf of clients at designated collection centers.

3. Mobilizing Retail Investors

   • Since retail investors often rely on brokers, they play a grassroots role in getting wide participation.

4. Bridge Between Issuer and Investors

   • Provide market feedback about pricing, investor sentiment, and subscription trends.

3) Legal/Regulatory Framework

• Governed by SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992.

• Only SEBI-registered stock brokers can act as Brokers to an Issue.

• Appointment must be in writing, with clear duties and commission structure.

• Brokers usually earn brokerage/commission (often a percentage of the amount mobilized).

4) Difference between Brokers, Underwriters & Merchant Bankers

Aspect	Brokers to an Issue	Underwriters	Merchant Bankers (Lead Managers)
Main Role	Market the issue, bring in investors	Guarantee subscription of unsubscribed portion	Manage the entire issue process
Risk	No financial risk	Bears risk of under-subscription	Advisory/managerial, not direct risk
Focus	Distribution & mobilization	Risk assurance	Compliance, coordination, management
Reward	Commission (brokerage)	Underwriting commission	Management fees from issuer

5) Importance of Brokers to an Issue

• Help ensure wider subscription by tapping into their client networks.

• Support price discovery through investor feedback.

• Increase retail participation in capital markets.

• Build trust and accessibility — many investors invest because of broker advice.

Brokers to an Issue are SEBI-registered stockbrokers appointed to market and mobilize subscriptions for a public issue, acting as a crucial link between investors and the issuing company.

Registrars to an Issue (RTIs)

1) Meaning

• A Registrar to an Issue (RTI) is a SEBI-registered intermediary appointed by the issuing company to handle the record-keeping and processing of applications during a public issue.

• They collect, verify, and maintain investor records and assist in allotment and refunds.

2) Functions of Registrars to an Issue

Pre-Issue Stage

• Print and distribute application forms and prospectus.

• Set up collection points and software for processing applications.

• Coordinate with bankers to issue and brokers.

During Issue

• Receive applications and maintain records of subscriptions.

• Verify details in application forms (investor name, PAN, DP ID, etc.).

• Prepare daily subscription status reports for lead managers and SEBI.

Post-Issue

• Prepare the basis of allotment in consultation with stock exchange.

• Finalize the list of successful applicants and number of securities allotted.

• Arrange for refunds to unsuccessful applicants.

• Send allotment advice electronically/physically to investors.

• Coordinate with depositories (NSDL/CDSL) for credit of securities in demat accounts.

• Maintain proper records for inspection by SEBI and company auditors.

3) Regulatory Framework

• Governed by SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, 1993.

• Must be registered with SEBI and comply with its guidelines.

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🔹 Share Transfer Agents (STAs)

1) Meaning

• A Share Transfer Agent (STA) is a SEBI-registered intermediary who handles the transfer of shares, maintenance of shareholder records, and investor servicing after securities have been issued.

• They ensure that any transfer, transmission, consolidation, or splitting of shares is properly recorded.

2) Functions of Share Transfer Agents

• Maintain the register of members/shareholders.

• Handle share transfers (for physical shares — though now mostly demat).

• Handle dematerialization and rematerialization requests with depositories.

• Process requests for:

  • Change of address/bank details

  • Transmission of shares (on death of shareholder)

  • Consolidation/splitting of certificates

• Assist in payment of dividends (coordinate with banks).

• Resolve investor grievances relating to transfers, non-receipt of shares, etc.

 Difference between RTIs and STAs

Aspect	Registrar to an Issue (RTI)	Share Transfer Agent (STA)
Main Role	Handles records & allotment during issue process	Handles share transfers and investor servicing post-issue
Stage	Pre-issue, during issue, post-issue (till allotment & refunds)	Continuous, throughout life of company’s securities
Focus	Application processing & allotment	Maintenance of shareholder records & transfers
Investor Interaction	Applicants (potential investors)	Shareholders (existing investors)
Examples	Karvy Computershare (earlier), Link Intime, KFin Technologies	Same big registrars also act as STAs

 Importance of RTIs & STAs

• Ensure smooth allotment of securities.

• Provide investor protection through accurate record keeping.

• Reduce fraud and errors in issue process.

• Essential for compliance with SEBI and Companies Act.

• Act as the communication bridge between company and investors.

• RTIs handle application records, allotment, and refunds during a public issue.

• STAs handle share transfer, demat/remat, dividend, and investor servicing after the issue.

• Together, they ensure proper functioning of primary and secondary markets.

Debenture Trustees

A Debenture Trustee is a SEBI-registered entity (usually a bank, financial institution, or specialized trustee company) appointed by a company issuing debentures/bonds. Their role is to protect the interests of debenture-holders (investors) and ensure the issuing company complies with all terms and conditions of the issue.

👉 In short: They act as a watchdog for investors in a debenture issue.

2) Legal/Regulatory Framework

• Governed by:

  • SEBI (Debenture Trustees) Regulations, 1993

  • Companies Act, 2013 (Section 71 – requires appointment of a Debenture Trustee for public issue of debentures)

• Appointment is mandatory for any public issue of debentures and for secured debentures exceeding certain limits.

3) Functions of Debenture Trustees

A. Before the Issue

• Enter into a Debenture Trust Deed with the issuing company.

• Ensure company creates necessary security/charge on assets (if debentures are secured).

• Examine the terms of issue to ensure investor protection.

B. During the Life of Debentures

• Monitor compliance with covenants in the debenture trust deed.

• Periodically check whether the company maintains required asset cover and security for debentures.

• Ensure timely payment of interest and redemption of debentures.

• Take action in case of default (e.g., enforcing security, representing debenture holders in legal proceedings).

• Maintain communication with debenture holders about important developments.

C. Investor Protection

• Safeguard debenture-holders from mismanagement, fraud, or diversion of funds.

• Act on behalf of investors collectively (since individual investors cannot negotiate or monitor a company).

4) Rights & Powers of Debenture Trustees

• Call meetings of debenture-holders in case of default or other serious issues.

• Appoint nominees on the Board of the issuing company if terms are breached.

• Enforce security or take possession of assets charged if company defaults.

• File suit or petition against the company on behalf of debenture-holders.

5) Duties of Debenture Trustees (SEBI guidelines)

• Ensure the trust deed is executed within the prescribed time.

• Inform SEBI promptly if the company defaults on interest/redemption.

• Maintain proper records and furnish reports to SEBI.

• Avoid conflict of interest (cannot act as trustee if they are also lender/borrower with significant exposure).

• Exercise due diligence to protect investors’ rights.

6) Importance of Debenture Trustees

• Provide security and assurance to investors.

• Enable companies to raise funds through debentures (since investors are more confident).

• Ensure corporate discipline in debt servicing.

• Act as a collective representative of scattered debenture-holders.

7) Examples of Debenture Trustees in India

• Axis Trustee Services Ltd.

• IDBI Trusteeship Services Ltd.

• SBI Cap Trustee Co. Ltd.

• Catalyst Trusteeship Ltd.

A Debenture Trustee is an independent guardian of debenture-holders’ interests, ensuring companies honor their commitments by monitoring security, compliance, and repayment obligations.

Portfolio Managers

                   A Portfolio Manager is a SEBI-registered professional or institution who, under an agreement with a client (individual or institution), advises, manages, and administers a portfolio of securities or funds on behalf of the client. They invest in equity, debt, mutual funds, structured products, or alternative assets based on the client’s goals, risk profile, and investment horizon.

Think of them as doctors for investments: they diagnose your financial condition and prescribe a portfolio.

2) Regulatory Framework

• Governed by the SEBI (Portfolio Managers) Regulations, 2020.

• Net worth requirement: Minimum ₹5 crore.

• Must obtain Certificate of Registration from SEBI before commencing services.

3) Types of Portfolio Management

1. Discretionary Portfolio Management

   • Portfolio Manager takes all investment decisions independently (client gives full discretion).

   • Example: Manager buys/sells shares on client’s behalf without prior approval each time.

2. Non-Discretionary Portfolio Management

   • Portfolio Manager gives advice; client takes final decision.

   • Transactions are executed only after client approval.

3. Advisory Portfolio Management

   • Only advisory role. The manager suggests investment ideas, but the client manages their own portfolio.

4) Functions of Portfolio Managers

• Investment Planning & Strategy

  • Understand client’s financial goals, risk appetite, and time horizon.

  • Design suitable investment portfolio.

• Diversification & Risk Management

  • Spread investments across asset classes to reduce risk.

  • Monitor and rebalance portfolio regularly.

• Research & Analysis

  • Conduct market research, sectoral studies, and stock analysis.

  • Provide reports on performance and future prospects.

• Execution of Transactions

  • Buy and sell securities on behalf of clients.

• Reporting & Transparency

  • Provide periodic reports (quarterly/half-yearly) to clients on portfolio value, transactions, and performance.

• Compliance & Custody

  • Ensure investments comply with SEBI and RBI rules.

  • Maintain separate client accounts and keep client funds segregated.

5) Advantages of Portfolio Managers

• Professional expertise in managing investments.

• Customized services — tailored to client’s goals.

• Better returns compared to unmanaged investments.

• Continuous monitoring of market conditions and timely action.

• Transparency through regular performance reports.

6) Limitations / Risks

• High entry-level investment requirement — SEBI mandates a minimum of ₹50 lakh investment with a Portfolio Manager.

• Costs and fees may be high (management fee, performance fee, brokerage).

• Market risk — returns are not guaranteed.

• Concentration risk if manager overweights certain stocks.

7) Examples of Portfolio Management Services (PMS) Providers in India

• ICICI Prudential Portfolio Management

• Kotak PMS

• HDFC PMS

• Motilal Oswal PMS

• ASK Investment Managers

• SBI Funds PMS

 Difference: Portfolio Managers vs. Mutual Funds

Aspect	Portfolio Managers (PMS)	Mutual Funds
Regulation	SEBI (Portfolio Managers) Regulations, 2020	SEBI (Mutual Funds) Regulations, 1996
Minimum Investment	₹50 lakh (as per SEBI)	₹500–₹5,000 (retail-friendly)
Portfolio	Customized, client-specific	Pooled, same for all investors in a scheme
Control	Client-specific discretion	Fund manager manages pooled funds
Reporting	Detailed, client-wise	Scheme-level NAV disclosure
Target Clients	HNIs, institutions	Mass retail investors

A Portfolio Manager is a SEBI-registered intermediary who provides customized investment management services to HNIs and institutions, with discretionary, non-discretionary, or advisory models, ensuring professional handling of investments.

                                     Comparison Table

Intermediary	Main Role / Functions	When Involved	Risk & Liability	Regulation / Registration / Requirements
Merchant Bankers / Lead Managers	Manage the entire issue process: drafting prospectus, SEBI approvals, coordinating underwriters, bankers, registrars; marketing the issue; advising the company on capital-raising strategy.	From fairly early in the issue-process: before filing with SEBI, through to allotment & listing.	Moderate: reputational risk; regulatory penalties if non-compliance; but not usually underwriting financial risk (unless also underwriter).	Must be registered with SEBI; net worth minimums depending on category (I, II, III, IV); SEBI’s regulations for merchant bankers / issue management.
Underwriters	Guarantee subscription of securities: commit to purchase unsubscribed portion; may also advise on pricing; assume financial risk of unsold securities.	At time of public or rights issue, when company needs assurance of full subscription.	High financial risk (if issue undersubscribed); also regulatory liability for disclosures etc.	Registered with SEBI; net worth minimum; governed by SEBI (Underwriters) Regulations; must have underwriting agreement.
Bankers to the Issue (Collecting Bankers)	Collect subscription money; maintain escrow/issue accounts; handle refunds; reconcile collections; support ASBA / online / branch collection; transfer proceeds.	During the subscription period of issue, till allotment and refund stage.	Operational risk (handling large sums), risk of delayed refunds, improper handling of funds.	Typically scheduled banks; must have capability (ASBA etc.); agreement with company / lead manager; SEBI guidelines.
Brokers to an Issue	Promote and sell issue to their client base; assist investors in application process; mobilize subscription; provide feedback on demand.	During issuance period (before and during subscription).	Low financial risk (they don’t guarantee subscription); but risk of regulatory compliance (mis-sold information, misleading marketing), reputational.	Must be SEBI-registered stock brokers; commission / brokerage agreement; disclosure norms; cannot mislead investors.
Registrars to an Issue / Share Transfer Agents (RTIs / STAs)	Maintain investor / applicant records; verify applications; prepare allotment lists; coordinate with depositories; handle post-issue shareholder records / transfers / dividend / dematerialization / transmission etc.	From application submission → allotment → post-issue maintenance throughout life of security.	Risk in record mismatches; delays in allotment or transfers; liability under SEBI / Companies Act; investor grievances.	SEBI registration; compliance with SEBI’s regulations; infrastructure (electronic/demat capability); good internal controls.
Debenture Trustees	For debenture / bond issues: protect interests of debt-holders; ensure compliance with trust deed; monitor security, enforce rights in default; ensure timely interest / redemption payments.	When company is issuing debt securities (especially where security / covenant is involved), and during the entire tenure of the debt.	Risk of default by issuer; legal risk; reputational. They may need to initiate enforcement actions.	SEBI (Debenture Trustees) Regulations; trust deed; must be independent; registered entity; required for public debentures under Companies Act.
Portfolio Managers	Manage investment portfolios for clients (HNIs, institutions) in discretionary / non-discretionary / advisory modes; choose securities, rebalance portfolio; provide reports etc.	After issue of securities (secondary market), and continuously over the investment horizon.	Market risk; fiduciary duty to clients; risk of poor performance; regulatory oversight.	SEBI (Portfolio Managers) Regulations; minimum net worth; registration with SEBI; disclosures of risks; client agreements.

Summary

Here are some of the main insights / take-home points from comparing all of them:

1. Different Intermediaries serve different stages of the issuance & post-issuance life-cycle

   • Some act before or during the issue (Merchant Bankers, Underwriters, Bankers to Issue, Brokers, RTIs).

   • Some are more post-issue or ongoing (STAs, Debenture Trustees, Portfolio Managers).

2. Varied Types of Risk

   • Underwriters have major financial risk.

   • Bankers to Issue have operational & fiduciary risks.

   • Registrar/Transfer Agent risks are mostly around record accuracy, timing, compliance.

   • Debenture Trustees are guardians of investor rights, with legal risk and reputational risk.

3. Regulatory Oversight is essential everywhere, but different rules apply depending on function. All must be registered with SEBI (or relevant authority), meet net worth / infrastructure / disclosure requirements, follow SEBI / Companies Act etc.

4. Overlap & Coordination

   • A smooth issue requires all these intermediaries to coordinate well. E.g. Merchant Bankers coordinating with Bankers, Underwriters, Registrars; RTAs working with DTs (for debt) or with depositories for transfers; Brokers helping with marketing etc.

   • Modern tech (demat, ASBA, online applications) increases dependency on reliable infrastructure & prompt communication between them.

5. Investor Protection is Central

   • Across all roles: ensuring transparency, proper record keeping, correct allotment/refunds, fulfilling obligations (interest/redemption), and recourse in case of default or delay.

6. Customisation vs Standardisation

   • Portfolio Managers are highly customized (to client needs), whereas functions like Registration, Underwriting etc. are more standardized by regulation.