The Securities and Exchange Board of India (SEBI) issues guidelines and circulars from time to time to regulate Merchant Bankers, Stockbrokers and other intermediaries in the financial market. SEBI Master Circular HO/49/14/15(3)2026-CFD-POD1/I/16178/2026 dated 24.07.2026, in particular, brings together all the applicable circulars for Merchant Bankers registered under SEBI (Merchant Bankers) Regulations, 1992.
Section 6 of Master Circular explains rules that apply when a Merchant Banker transfers its business to another legal entity. This article explains these rules in a fairly simple terms. If you are planning to transfer your merchant banking business to another legal entity, we recommend going through this article to know about the rules you’ll need to follow.
Merchant bankers in India are financial intermediaries registered with the Securities and Exchange Board of India (SEBI). They provide essential services in the capital market so as to help companies raise funds, manage public issues and carry out various corporate transactions. Their main services include but are not limited to the following:-
Initial Public Offers (IPOs)
Open Offers
Buy-backs
Valuation and advisory services
Corporate restructuring and other capital market transactions
Delisting of securities
Further Public Offers (FPOs)
Rights Issues
Qualified Institutional Placements (QIPs)
You May Also Read:- Benefits of Appointing a Merchant Banker for an IPO
The rules for transfer of business by a merchant banker (referred to as the transferor) to another entity (referred to as the transferee) are detailed below:-
The transferee must obtain new registration from SEBI in the same capacity before the business transfer if it is not already registered with SEBI in that capacity. SEBI will issue a new registration number to the transferee, which will be different from the transferor's registration number, in the following scenarios:-
When the business is transferred through regulatory processes (such as merger, amalgamation or corporate restructuring mandated by a primary regulator, government authority or NCLT); or
Through non-regulatory processes (such as private agreements or memorandums of understanding related to commercial dealings), regardless of whether transferor continues to exist or ceases to exist after transfer.
In the event of a change in control through either regulatory or non-regulatory processes, prior approval and fresh registration must be obtained. When granting fresh registration to the same legal entity due to a change in control, the existing registration number will be retained.
If the transferor ceases to exist, it must surrender its certificate of registration.
In the case of a complete transfer of business by the transferor, it is required to surrender its certificate of registration.
If there is a partial transfer of business by the transferor, it may continue to hold its certificate of registration.
Need assistance in fulfilling SEBI compliance requirements? Connect with our consultants at Registrationwala!
Disclaimer: This blog post is intended for general informational purposes only. The information provided is based on the SEBI Master Circular. As rules and regulations may change from time to time, readers are advised to refer to official SEBI website for getting the latest updates. Alternatively, readers may consult SEBI compliance professionals for availing further guidance.
Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, finance and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.
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