The SEBI circular dated January 2, 2026 operationalises the SEBI (Merchant Bankers) Amendment Regulations, 2025 with effect from January 3, 2026, prescribing phased enhancement of net worth and newly introduced liquid net worth requirements for existing Merchant Bankers (MBs) till January 2, 2028, mandatory self-categorisation into Category I or II, limits on underwriting exposure (20× liquid net worth), and half-yearly CA certifications. It introduces a detailed definition of liquid net worth with prescribed haircuts, mandates minimum cumulative revenue thresholds over three preceding years (₹25 crore for Category I and ₹5 crore for Category II, first assessed from April 1, 2029), requires NISM certifications for key employees and compliance officers within stipulated timelines, enforces separation and independence of the compliance officer, prescribes experience requirements for principal officers, prohibits outsourcing of core merchant banking activities, and lays down comprehensive conditions for undertaking non-SEBI regulated activities through ring-fenced SBUs with disclosures, Chinese walls, and board oversight. The circular also strengthens disclosure norms where MBs are involved only in marketing of issues and sets specific timelines for transition, reporting, and ongoing compliance.
Link:https://www.sebi.gov.in/sebiweb/home/HomeAction.do?doListing=yes&sid=1&ssid=7&smid=0
