Sebi Extends Deadline for Merchant Bankers to Meet SBU, Net Worth Requirements

Sebi Extends Deadlines for Merchant Bankers Amid Operational Challenges

The Securities and Exchange Board of India (Sebi), the country's markets regulator, has extended the timelines for merchant bankers to comply with certain provisions related to separate business units (SBUs), net worth, and liquid net worth requirements. The decision was taken due to operational challenges faced by the industry, as highlighted by market participants.

Under the revised timelines, merchant bankers will now have until December 31 to transfer activities to separate business units in accordance with Sebi (Merchant Bankers) Regulations. This is a significant extension of the original deadline, which was July 3, as per a circular issued by the markets regulator. The revised deadline allows merchant bankers more time to establish the necessary systems and processes for implementing the SBU framework.

Sebi has also extended the compliance deadlines for enhanced net worth requirements and liquid net worth requirements. The Phase I compliance deadline for enhanced net worth requirements has been extended to March 31, 2027, from January 2, 2027. Similarly, the Phase II deadline has been shifted to March 31, 2028, from January 2, 2028. Additionally, the compliance timelines for Phase I and Phase II liquid net worth requirements have been extended to March 31, 2027, and March 31, 2028, respectively.