The Securities and Exchange Board of India has updated its master circular for registered merchant bankers, consolidating applicable directions in one place and aligning them with the amended SEBI Merchant Bankers Regulations, 1992 that took effect on January 3, 2026. The update also incorporates the online registration mechanism and the January 2, 2026 and June 11, 2026 circulars on consequential compliance requirements and timeline extensions. The revised compilation now reflects the phased capital adequacy and liquid net worth framework for Category I and Category II merchant bankers, the requirement for existing firms to re-categorize and demonstrate compliance through Chartered Accountant-certified filings, and the definition of liquid net worth with prescribed haircuts. It also captures the certification requirements for employees and compliance officers, the requirement that the compliance officer be independent from other key staff, the requirement for a principal officer with at least five years of financial market experience, a cap on underwriting obligations at 20 times liquid net worth, and minimum revenue thresholds from permitted activities with the first assessment from April 1, 2029. In addition, it reflects the requirement to ring-fence non-SEBI-regulated activities through separate business units, make related disclosures to clients and on websites, and stop outsourcing core merchant banking activities. The updated reporting annexure requires half-yearly reporting through the SEBI Intermediary Portal and includes certifications on net worth, liquid net worth and underwriting compliance. With the issuance of the master circular, the earlier circulars listed in its appendix stand rescinded to the extent they relate to merchant bankers. Actions already taken, pending applications, and accrued rights, liabilities, penalties and proceedings under those rescinded circulars remain preserved.

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