SEBI Tightens Merchant Banker Norms: Higher Capital, Strict Compliance Ahead

• SEBI introduces new norms for merchant bankers, effective January 3, 2026, to strengthen financial resilience and investor protection.
• Significantly raises capital and liquid net worth requirements, with phased implementation until January 2, 2028.
• Mandates NISM certification for key employees, independent compliance officers, and 5 years experience for principal officers.
• Introduces minimum cumulative revenue thresholds (Rs 25 Cr for Cat I, Rs 5 Cr for Cat II) over three financial years, with first assessment from April 1, 2029.
• Restricts outsourcing of core activities, mandates segregation of non-SEBI regulated activities, and imposes strict disclosure rules for issue marketing.

Why It Matters: SEBI's new rules enhance capital, compliance, and operational standards for merchant bankers, boosting market integrity.