On Apr. 28, 2026, IND SEBI granted DTs an additional six months to obtain acknowledgments and submit a compliance report to their boards.
The decision is based on representations received from the industry citing operational challenges in establishing the necessary systems for effective implementation.
Accordingly, the provisions shall now be implemented by Oct. 27, 2026.
All other provisions of the SEBI circular dated Nov. 25, 2025 shall remain unchanged.
On Oct. 27, IND SEBI amended regulations on debenture trustees.
IND SEBI published Securities and Exchange Board of India (debenture trustees) (amendment) regulations, 2025, amending the 1993 regulations on this subject.
Document dated Oct. 27, 2025, received from IND SEBI Nov. 3, summarized Nov. 6.
Outline of Amendments
Debenture trustees (DTs) may conduct activities under other financial sector regulators or fee-based, non-fund-based activities in the financial service sector not regulated by IND SEBI/other regulators, on an arm's-length basis via separate business units (SBUs).
Debenture trustees also regulated by IND RBI shall conduct trustee activities via a separate business unit; existing debenture trustees may transfer activities to separate business units within 6 months of this notification or the extended period as specified.
The required net worth must be ring-fenced from any adverse impact of such activities.
Debenture trustees shall follow the format and timelines as specified by IND SEBI; deviations may be allowed if key summary sheet explaining deviations and rationale is included in the issuer’s general information/key information document/prospectus.
Debenture trustees may inspect issuer’s books of accounts, registers, trust property as needed to perform duties; may call for documents from the issuer or intermediaries; may utilize the Recovery Expense Fund with the consent of debenture holders.
Effectiveness
The amendments shall take effect from Oct. 22, 2025.
Nov. 2025 Non-SEBI Regulated Activities
On Nov. 25, 2025, IND SEBI issued circular re activities regulated by other financial sector regulators.
DTs may perform such activities only through separate, ring-fenced business units (SBUs) operating at arm's length from IND SEBI-regulated activities.
Non-SEBI activities must maintain separate records, staff, grievance procedures, and clearly segregated marketing materials, with limited staff crossing the Chinese Wall under board-approved procedures.
DTs may share IT, other resources between activities regulated, not regulated by the board in line with board-approved procedures; they must disclose on their website non-SEBI-regulated activities, clarify SEBI investor protection mechanisms' applicability.
When activities fall under another financial regulator, DTs must specify the relevant regulator and comply with the relevant rules on risk, eligibility, grievance handling, inspection, and enforcement.
Before engaging in any non-SEBI-regulated activity, DTs must provide written disclosures and obtain acknowledgments from clients confirming their understanding of the risks and lack of SEBI protection.
Within 6 months from the date of the circular, existing clients must also receive the same disclosures and DT must receive their acknowledgments and submit a compliance report to the board.
DTs must include a board-approved undertaking in their half-yearly compliance report confirming compliance with Regulation 9C in Oct. 27, 2025 circular and latest circular.
DTs also regulated by IND RBI must conduct DT activities exclusively via their SBUs that comply with Para of the latest circular.
The published circular is effective from Nov. 25, 2025.
Apr. 2026 Extension of Timeline
On Apr. 28, 2026, IND SEBI granted DTs an additional six months to obtain acknowledgments and submit a compliance report to their boards.
The decision is based on representations received from the industry citing operational challenges in establishing the necessary systems for effective implementation.
Accordingly, the provisions shall now be implemented by Oct. 27, 2026.
All other provisions of the SEBI circular dated Nov. 25, 2025 shall remain unchanged.
