The Securities and Exchange Board of India (SEBI) has granted additional time to Merchant Bankers for complying with key requirements introduced under the SEBI (Merchant Bankers) (Amendment) Regulations, 2025. The extension follows industry representations highlighting operational difficulties in implementing the Separate Business Unit (SBU) framework and seeking alignment of net worth compliance deadlines with the financial year-end.

Under a circular issued on June 11, 2026, SEBI revised the timelines prescribed in its earlier circular dated January 2, 2026. Merchant Bankers now have until December 31, 2026, to transfer eligible activities to Separate Business Units under Regulation 13A and comply with related SBU requirements. Further, the deadlines for meeting enhanced net worth and liquid net worth norms under Regulations 7 and 7A have been extended from January 2 to March 31 of the respective compliance years.

Thus, Phase I compliance for net worth and liquid net worth requirements has been deferred to March 31, 2027, while Phase II compliance has been extended to March 31, 2028. The deadline for informing SEBI about categorisation as Category I or Category II Merchant Banker has also been shifted to March 31, 2027.

SEBI clarified that all other provisions of its January 2, 2026 circular remain unchanged and must continue to be complied with by Merchant Bankers. The regulator stated that the relaxation is intended to facilitate smoother implementation of the amended regulatory framework while addressing practical challenges faced by industry participants.

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