Description
Comprehensive regulations governing merchant bankers in India, including registration requirements, definitions, and regulatory framework for issue management and corporate advisory services.
Summary
The Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992, as last amended on December 5, 2025, provides the comprehensive regulatory framework for merchant bankers operating in India. Originally notified on December 22, 1992, these regulations define merchant banking activities, establish registration requirements, and set forth compliance standards for entities engaged in issue management and corporate advisory services.
Key Points
- Regulations came into force on December 22, 1992, under powers conferred by Section 30 of the SEBI Act, 1992
- Merchant banker defined as any person engaged in issue management including selling, buying, or subscribing to securities, or acting as manager, consultant, adviser, or rendering corporate advisory services
- Issue defined as offer of sale or purchase of securities by body corporate or person/group to public or security holders through merchant banker
- Certificate of registration issued by SEBI required for merchant banking activities
- Body corporate definition aligned with Companies Act, 2013 (Section 2, Clause 11)
- Change in control provisions differentiated for listed and unlisted entities
- Inspecting authority provisions for regulatory oversight
Regulatory Changes
- Latest amendment dated December 5, 2025
- Previous amendments include:
- Securities and Exchange Board of India (Merchant Banker) (Amendment) Regulations, 2021 (effective March 30, 2021)
- Securities and Exchange Board of India (Change In Conditions Of Registration Of Certain Intermediaries) (Amendment) Regulations, 2016 (effective December 8, 2016)
- Securities and Exchange Board of India (Change in conditions of Registration of Certain Intermediaries) (Amendment) Regulations, 2011 (effective April 19, 2011)
- Securities and Exchange Board of India (Merchant Bankers) (Third Amendment) Regulation, 2006 (effective September 7, 2006)
- Omission of “enquiry officer” definition by 2002 regulations
- Removal of “initial or permanent” terminology from certificate definition in 2016
- Change in control provisions added for both listed and unlisted companies with different criteria
Compliance Requirements
- All merchant bankers must obtain certificate of registration from SEBI
- Compliance with definition of merchant banking activities: issue management, arranging selling/buying/subscribing to securities, acting as manager, consultant, adviser, or providing corporate advisory services
- Listed companies must follow change in control provisions per SEBI regulations under Section 11(2)(h) of SEBI Act
- Unlisted companies must follow change in control provisions per Section 2(27) of Companies Act, 2013
- Subject to inspection by SEBI-appointed inspecting authority
- Adherence to forms specified in Schedule I
Important Dates
- Original notification: December 22, 1992
- Latest amendment: December 5, 2025
- Document publication date: December 24, 2025
Impact Assessment
Market Impact: Medium - These regulations form the foundational framework for merchant banking operations in India, affecting all entities engaged in issue management and corporate advisory services. The consolidated document with latest amendments provides clarity on current regulatory requirements.
Operational Impact: Medium - Merchant bankers must ensure ongoing compliance with updated definitions and registration requirements. Change in control provisions require different treatment for listed versus unlisted entities, necessitating operational awareness of applicable standards.
Compliance Impact: Medium - While this represents a consolidated regulation document rather than new requirements, merchant bankers must verify compliance with all current definitions and standards, particularly recent amendments effective from December 5, 2025.
Impact Justification
Consolidated regulations document with latest amendments governing merchant banker operations; affects all merchant bankers but represents updated compilation rather than new requirements