--- title: "SEBI Consolidates Regulatory Framework for Merchant Bankers through Master Circular" date: 2026-07-20 author: "King Stubb & Kasiva" url: https://ksandk.com/newsletter/sebi-master-circular-merchant-bankers/ --- # SEBI Consolidates Regulatory Framework for Merchant Bankers through Master Circular Posted On - 20 July, 2026 • By - King Stubb & Kasiva **Master Circular dated July 14, 2026** ## Overview SEBI has issued a comprehensive **Master Circular** consolidating all operative circulars applicable to Merchant Bankers registered under the SEBI (Merchant Bankers) Regulations, 1992. The circular incorporates regulatory amendments introduced through the revised Merchant Bankers Regulations and supersedes earlier circulars, while preserving actions already taken and rights accrued under the previous framework. The Master Circular serves as a single reference document governing the registration, operational compliance, governance and regulatory obligations of Merchant Bankers. ## Registration and Capital Framework The circular streamlines procedures relating to registration, change in control, transfer of business and investor grievance mechanisms. It also prescribes the **phased implementation of revised capital adequacy and liquid net worth requirements** for Category I and Category II Merchant Bankers, with compliance milestones extending through 31 March 2028. Further guidance has been provided regarding the eligibility criteria for principal officers, independence requirements applicable to compliance officers, deployment of surplus funds, and regulatory approvals required for corporate restructuring. ## Operational Compliance Requirements Merchant Bankers are required to continue filing **half-yearly compliance reports** through the SEBI Intermediary Portal and maintain enhanced public disclosures, including three-year issue management track records, Investor Charters and periodic investor complaint statistics. The Master Circular also reiterates advisory measures concerning **cybersecurity and data protection**, particularly in relation to the use of cloud-based Software-as-a-Service (SaaS) platforms for compliance functions. ## Governance, Risk Management and Business Conduct The consolidated framework introduces or reiterates several important **governance obligations**. ### Key Governance Obligations - Phased implementation of underwriting exposure limits linked to liquid net worth - Minimum revenue thresholds from permitted merchant banking activities - Disclosure obligations where a Merchant Banker undertakes only marketing activities in an issue due to prescribed shareholding thresholds - Segregation of non-SEBI regulated businesses through appropriately ring-fenced business units - Restrictions on outsourcing core merchant banking functions, compliance and KYC activities - Strengthened conflict management standards, including restrictions on dealing in securities while in possession of unpublished price sensitive information and enhanced controls over dissemination of market-sensitive information The circular also reinforces compliance obligations relating to **investor grievance redressal** through SCORES and contains detailed reporting formats through multiple annexures. ## Why It Matters The Master Circular significantly improves **regulatory accessibility** by consolidating the fragmented compliance framework into a single authoritative document. Merchant Bankers should undertake a comprehensive review of their compliance policies, governance structures, outsourcing arrangements, underwriting limits and capital planning to ensure alignment with the phased implementation timelines extending through 2029. The circular is expected to become the *principal regulatory reference* for legal, compliance and transaction advisory teams engaged in capital markets transactions. *Last Updated on 20 July, 2026* Get King Stubb & Kasiva’s legal updates in your Google feed[![Add King Stubb & Kasiva as a preferred source on Google](https://ksandk.com/wp-content/uploads/google_preferred_source_badge_light_en@2x.png)](https://www.google.com/preferences/source?q=https://ksandk.com/) --- ## Office Locations - [New Delhi](https://ksandk.com/locations/top-corporate-law-firm-in-delhi/) (HQ): +91-11-41318190 | info@ksandk.com - [Mumbai](https://ksandk.com/locations/top-corporate-law-firm-in-mumbai/): 3 offices (Nariman Point, Lower Parel, Andheri) | mumbai@ksandk.com - [Bangalore](https://ksandk.com/locations/top-corporate-law-firm-in-bangalore/): bangalore@ksandk.com - [Chennai](https://ksandk.com/locations/chennai/): chennai@ksandk.com - [Hyderabad](https://ksandk.com/locations/hyderabad/): hyderabad@ksandk.com - [Pune](https://ksandk.com/locations/pune/): pune@ksandk.com - [Kochi](https://ksandk.com/locations/kochi/): kochi@ksandk.com ## Contact - [Contact Page](https://ksandk.com/contact-us/) - General: info@ksandk.com | +91-11-41318190 - WhatsApp: +91-7428567444 - [Privacy Statement](https://ksandk.com/privacy-statement/) - [Terms of Use](https://ksandk.com/terms-of-use/)