Appointment of Brokers
The stock exchange(s) would appoint the SEBI registered stock brokers of the exchange to accept applications and place orders with the company considering them as collection centers. They would collect the money from the clients for orders placed and in case clients fail to pay for shares allocated, the brokers would have to pay the amount. The company/ lead manager should ensure that the appointed brokers are financially capable of honoring their commitments if their clients default. The company would pay the brokers a commission/fee for their services and the stock exchange should ensure that they do not levy a service fee on their clients in lieu of their services.