SEBI Amends The Debenture Trustees Regulations

SEBI by way of notification no. SEBI/LADNRO/GN/2025/269 dated 22.10.2025, has notified the SEBI (Debenture Trustees) (Amendment) Regulations, 2025¹ ("DT Amendment Regulations"), to amend the SEBI (Debenture Trustees) Regulations, 1993 ("DT Regulations"), which came into force on 24.10.2025.

SEBI has introduced the following key amendments to the DT Regulations:

(i) Permitted Activities for Debenture Trustees (New Regulation 9C): Debenture Trustees ("DTs") may now undertake additional activities through separate business units on an arms-length basis, subject to conditions specified by SEBI, including:

1. Activities falling under the purview of other financial sector regulators (such as RBI, IRDAI, PFRDA, IFSCA, IBBI, MCA, and other authorities specified by SEBI) in accordance with regulations or guidelines issued by such regulators; and/or
2. Fee-based, non-fund based activities pertaining to the financial services sector that do not fall under SEBI or any other financial sector regulator.
3. DTs regulated by RBI must carry out DT activities through a separate business unit. Existing registered DTs may transfer their activities to separate business units within six months from 24.10.2025, or such extended period as SEBI may specify. DTs must ensure that the net worth specified under the DT Regulations is ring-fenced from any adverse impact arising from undertaking these permitted activities.

(ii) Debenture Trust Deed Requirements (Amended Regulation 14): DTs shall accept trust deeds containing matters specified in Section 71 of the Companies Act, 2013 ("Companies Act") and Form No. SH.12 under the Companies (Share Capital and Debentures) Rules, 2014, in such format and within such timelines as specified by SEBI under Regulation 18(1) of the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021. However, DTs may accept deviations from the prescribed format if the issuer provides a key summary sheet in the General Information Document/Key Information Document or Shelf Prospectus capturing the deviations along with the rationale for the same.

(iii) Enhanced Rights of DTs (New Regulation 15A): DTs are now empowered with the following rights to aid in performance of their duties, obligations, roles and responsibilities:

1. inspect books of account, records, and registers of the issuer and the trust property to the extent necessary for discharging obligations;
2. call for information/documents from the issuer with respect to the issue and documents from such intermediaries as may be specified by SEBI from time to time; and
3. utilize the recovery expense fund, with the consent of debenture holders, in the manner specified by SEBI.

Footnote

1 https://www.sebi.gov.in/legal/regulations/oct-2025/securities-and-exchange-board-of-india-debenture-trustees-amendment-regulations-2025_97589.html

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