The Securities and Exchange Board of India (SEBI), through its circular dated June 11, 2026, has extended the timelines for merchant bankers to comply with certain provisions introduced under the SEBI (Merchant Bankers) (Amendment) Regulations, 2025 and the operational framework prescribed in the January 2, 2026 circular. The extension follows industry representations citing practical difficulties in establishing Separate Business Units (SBUs) and requesting alignment of enhanced net worth requirements with the close of the financial year. Consequently, deadlines for transferring activities to SBUs and complying with related operational requirements have been extended from July 3, 2026 to December 31, 2026. Similarly, Phase I and Phase II compliance timelines for revised net worth and liquid net worth requirements have been shifted to March 31, 2027 and March 31, 2028, respectively. The deadline for merchant bankers to intimate SEBI regarding their categorisation has also been extended to March 31, 2027.
Securities and Exchange Board of India
Circular No.H0/49/14/15(2)2026-CFD-POD1/1/13567/2026 Dated: June 11, 2026
To,
All Registered Merchant Bankers (MBs)
Madam/Sir,
Subject: Extension of timelines for compliance with certain provisions of Circular dated January 02, 2026
1. SEBI (Merchant Bankers) (Amendment) Regulations, 2025 (“MB Amendment Regulations”) were notified on December 05, 2025, inter alia, revising the net worth and liquid net worth requirements applicable to Merchant Bankers and introducing Regulation 13A relating to activities that may be undertaken by Merchant Bankers and segregation of other activities through Separate Business Units (“SBUs”).
2. In this regard, SEBI issued Circular No. H0/49/11/11(106)2025-CFD-RAC-DIL3/1/1796/2026 dated January 02, 2026 (“MB Circular”), inter alia, specifying the operational framework, implementation timelines and compliance requirements for Merchant Bankers.
3. Based on representations received from the industry highlighting operational challenges in establishing the necessary systems and processes for implementation of the SBU framework and seeking alignment of the compliance timeline for net worth and liquid net worth requirements with the end of the financial year, it has been decided to grant additional time for compliance with the aforesaid requirements.
4. Accordingly, the timelines prescribed under the MB Circular dated January 02, 2026 shall be as under:
| S. no. |
Requirement | Existing Timeline | New Timeline |
| a. | Transfer of activities to Separate Business Unit(s) in terms of Regulation 13A(2) of the MB Regulations and Clause 11.2.1 of the MB Circular | July 03, 2026 | December 31, 2026 |
| b. | Compliance with Clause 11.2.10 of the MB Circular | July 03, 2026 | December 31, 2026 |
| c. | Compliance with net worth requirements under Regulation 7 of the MB Regulations — Phase I | January 02, 2027 | March 31, 2027 |
| d. | Compliance with net worth requirements under Regulation 7 of the MB Regulations — Phase II | January 02, 2028 | March 31, 2028 |
| e. | Compliance with liquid net worth requirements under Regulation 7A of the MB Regulations — Phase I | January 02, 2027 | March 31, 2027 |
| f. | Compliance with liquid net worth requirements under Regulation 7A of the MB Regulations — Phase II | January 02, 2028 | March 31, 2028 |
| g. | Intimation to SEBI regarding categorisation as Category I or Category II Merchant Banker | January 02, 2027 | March 31, 2027 |
7. All other provisions of the MB Circular dated January 02, 2026 shall remain unchanged and shall be complied by Merchant Bankers.
8. This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 45 of the SEBI (Merchant Bankers) Regulations, 1992.
9. This circular is available on the SEBI website at sebi.gov.in under the category “Legal” and under the drop-down “Circulars”.
10. This circular is issued with the approval of the competent authority.
Yours faithfully,
Vimal Bhatter
Deputy General Manager
Corporation Finance Department
Tel no.: 022-40459386/022-26449386
Email ID: vimalb@sebi.gov.in
