SEBI Updates Valuer Norms Under SBEB Regulations

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  • Last Updated on 8 December, 2025

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SEBI Valuer Revision SBEB Regulations

Notification F. No. SEBI/LAD-NRO/GN/2025/284, Dated: 03.12.2025

1. Introduction

The Securities and Exchange Board of India (SEBI) has introduced key amendments to the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations (SBEB Regulations), significantly revising the definition and eligibility criteria of valuers. One of the major changes includes replacing the role of a merchant banker with that of an independent registered valuer, aligning valuation requirements with enhanced transparency and governance standards.

2. Updated Definition of Valuer

Under the revised provisions, SEBI has broadened and standardised the definition of a “valuer” to ensure greater independence, professional competence, and regulatory oversight. Instead of relying on merchant bankers for valuation exercises, companies will now be required to engage a registered valuer, recognised under the Companies Act, 2013. This shift aims to bring consistency in valuation practices and strengthen the reliability of valuation reports used for employee benefit schemes.

3. Replacement of Merchant Banker With Independent Registered Valuer

Previously, merchant bankers were mandated for valuations related to employee stock option schemes (ESOPs) and other share-linked benefits. With the amendment, SEBI has replaced merchant bankers with independent registered valuers, ensuring a more specialised and unbiased valuation process. Registered valuers, regulated by the Insolvency and Bankruptcy Board of India (IBBI), offer deeper domain-specific expertise, making valuations more credible and compliant.

4. Impact on Companies and Employee Benefit Schemes

The move is expected to enhance governance, as companies implementing ESOPs, RSUs, SARs, and sweat equity schemes will now follow a more robust valuation framework. This change will impact listed entities, valuation professionals, and compliance officers who must update their internal processes and documentation in line with the new regulations. Improved valuation accuracy is also likely to strengthen investor confidence and reduce discrepancies in share-based compensation reporting.

5. Conclusion

SEBI’s revision of the valuer definition and the shift from merchant bankers to independent registered valuers marks an important step toward strengthening transparency and accountability under the SBEB Regulations. By aligning the framework with the Companies Act valuation ecosystem, SEBI aims to ensure reliable, fair, and standardised valuation practices across the corporate landscape. Companies must now adapt to these changes to ensure timely and seamless regulatory compliance.

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied