TaxTMI 
TaxTMI 
Specification of the consequential requirements with respect to Amendment of Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992
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....A are applicable as follows: a) In case of applications made on or after January 03, 2026, the applicants shall fulfill the revised capital adequacy requirements under regulation 7 and new liquid net worth requirements under regulation 7(A) as on date of its application. b) Existing Merchant Bankers (MBs) shall comply with the above requirements in phased manner as given at para 2.2. Those applicants who have filed application before January 03, 2026 and are granted registration subsequently are also considered as existing MBs for the purpose of this circular. 2.2. For existing MBs, the MB Regulations empowers Board to specify the time and manner for its implementation. Accordingly, to ensure smooth adoption of these requirements, it has been decided that revised capital adequacy and new liquid net worth requirements shall apply to existing MBs in a phased manner as under: Table (I): Phased implementation of capital adequacy and liquid net worth requirements Category Phase (I) - on or before January 02, 2027 Phase (II) - on or before January 02, 2028 capital adequacy being net w....
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....nt securities) 10% Listed securities of Nifty 500 companies held either as investment or Stock-in-Trade/ Inventories 30% *Value of these instruments to be considered for calculating liquid net worth shall be the value as recorded in the books of accounts, on the date of computation of the net worth. Illustration: Particulars Amount (Rs.) Listed Shares A Rs. 200 G-Sec B Rs. 100 Total Marketable Securities A+B Rs. 300 Value to be considered for calculating liquid net worth 70% of Listed Shares i.e., 70% of Rs. 200 = Rs. 140 90% of G Sec i.e., 90% of Rs. 100 = Rs. 90 Rs. 230 4. Conditions for compliance in respect of underwriting obligations: 4.1. In terms of newly inserted sub-regulation (2) of Regulation 22B of MB Regulations, total underwriting obligations of MB shall not exceed 20 times of its liquid net worth. For existing MBs, Board has been empowered to specify the time and manner of compliance. Accordingly, it is specified that existing MBs shall comply with this requirement within two years from the effective date, i.e., by January 02, 2028....
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.... MB Regulations, the compliance officer shall be separate and independent from the principal officer and the employees referred to in clause (b) of regulation 6. 6.2. The Board has been empowered to specify time and manner of compliance with the provision for existing MBs. It is, accordingly, specified that existing MBs shall comply with the requirement of compliance officer to be separate and independent from principal officer and the employees referred to in clause (b) of regulation 6, within ninety days from the effective date, i.e., on or before April 03, 2026. 6.3. For any registration granted on or after April 03, 2026, for the application filed before January 03, 2026, this condition shall be applicable from the date of grant of registration. 7. Requirement of principal officer with relevant experience: 7.1. According to substituted definition of principal officer in clause (d) of sub-regulation (1) of regulation 2 of MB Regulations, "principal officer" means an employee of the merchant banker, who has at least five years of experience in working in the financial markets, and who has been designated as such by the merchant banker, and is responsible for the....
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.... case it is unable to meet the minimum revenue due to certain circumstance(s). Accordingly, it is specified that SEBI shall, inter alia, take into account the following circumstances in deciding whether to cancel the registration of an MB for not meeting minimum revenue criteria, namely: 9.4.1. Natural calamities like flood, earthquake, 9.4.2. Outbreak of pandemic situations like COVID-19 etc. 9.4.3. Global Economic Recession 9.4.4. Geopolitical tensions and war 9.5. MBs are required to submit details of revenue from permitted activities to SEBI within three months from the end of each financial year, starting from FY 2026-27. 10. Disclosure to be made by Merchant Banker where it is only involved in the marketing of an issue: 10.1. In terms of regulation 21C of MB Regulations, an MB shall not lead manage any public issue, where its directors, other key managerial personnel, compliance officer, employees referred to in clause (b) of Regulation 6, or their relatives, individually or in aggregate hold more than 0.1% of the paid up share capital or shares whose nominal value is more than 10,00,000 rupees, whichever is lower, in t....
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....al Personnel. 11.2.5. The other resources, including the information technology infrastructure, may be shared between the activities regulated by SEBI and activities that are not regulated by SEBI, subject to due procedures approved by the board of directors of the MB. 11.2.6. The MB shall duly disclose on its website, the list of the activities that are not regulated by SEBI or any other Financial Sector Regulator (FSR), along with a disclosure that none of the SEBI investor protection mechanism will be available for any grievances or disputes arising out of or pertaining to non-SEBI regulated activities. Existing MBs undertaking non-SEBI regulated activities as on the effective date shall make the said disclosure on its website, within thirty days from the effective date, i.e., on or before February 02, 2026. 11.2.7. If an MB undertakes activity regulated by other FSR, the name of the relevant FSR should also be specified in disclosures to relevant stakeholders. Further, the MB shall comply with the regulatory framework, if any, as may be specified by the respective FSR for the matters relating to policy eligibility criteria, risk management, investor grie....