Devolvement

{{about|a specialist concept in banking|the more general concept for which this name is often a synonym|devolution (disambiguation)}}

{{about|a specialist concept in banking|the more general concept for which this name is often a synonym|devolution (disambiguation)}}

In the [[investment banking]] sector, particularly in [[India]], '''devolvement''' is a process whereby if an investment issue is undersubscribed, an [[Underwriter#Securities underwriting|underwriter]] is required to subscribe to the remaining shares. The outstanding unsubscribed amount ''devolves'' onto the underwriter.{{sfn|Subramanyam|2008|p=9–4}} This is also known as '''hard underwriting'''.{{sfn|CompetitionCommission|1999|p=58}} The [[Securities and Exchange Board of India]] publishes guidelines and a recommended method of computation relating to the extent of the devolvement onto a particular underwriter in the case where there are multiple underwriters, or sub-underwriters.{{sfn|Subramanyam|2008|p=9–4}}

In the [[investment banking]] sector, particularly in [[India]], '''devolvement''' is a process whereby if an investment issue is undersubscribed, an [[Underwriter#Securities underwriting|underwriter]] is required to subscribe to the remaining shares. The outstanding unsubscribed amount ''devolves'' onto the underwriter.{{sfn|Subramanyam|2008|p=9–4}} This is also known as '''hard underwriting'''.{{sfn|CompetitionCommission|1999|p=58}} The [[Securities and Exchange Board of India]] publishes guidelines and a recommended method of computation relating to the extent of the devolvement onto a particular underwriter in the case where there are multiple underwriters, or sub-underwriters.{{sfn|Subramanyam|2008|p=9–4}}

== Regulatory framework in India ==

In India, devolvement arises within the broader underwriting framework regulated by the [[Securities and Exchange Board of India]] (SEBI). Under the SEBI (Underwriters) Regulations, 1993, an underwriter is a person who undertakes to subscribe to securities of a body corporate when the existing shareholders or the public do not subscribe to the securities offered to them.{{cite web

|title=SEBI (Underwriters) Regulations, 1993

|url=https://www.indiacode.nic.in/ViewFileUploaded?file=underwriters.pdf&path=AC_CEN_2_11_00014_199215_1517807319932%2Fregulationindividualfile%2F

|website=India Code

|access-date=19 April 2026

}}

SEBI’s investor guidance on the primary market also identifies underwriters as registered intermediaries involved in public issues and notes that offer documents disclose details of underwriting arrangements.{{cite web

|title=Introduction: How Primary Market Works

|url=https://investor.sebi.gov.in/pdf/reference-material/primarymarkets.pdf

|website=Securities and Exchange Board of India

|access-date=19 April 2026

}}

In practice, devolvement occurs when the level of subscription falls below the amount committed under the underwriting arrangement, requiring the underwriter to subscribe to the unsubscribed portion of the issue.

== Notes ==

== Notes ==