SEBI has amended the Debenture Trustees Regulations, 1993, to broaden the permissible activities of debenture trustees, align trust deed requirements with the Non-Convertible Securities (NCS) framework, and strengthen trustee rights in performing fiduciary duties

(1) In regulation 2, after clause (aa) and before clause (ab), the following clause shall be inserted, namely –
“(aaa) ‘Board’ means the Securities and Exchange Board of India established under sub-section (1) of section 3 of the Act;”

(2) After the omitted regulation 9B and before regulation 10, the following shall be inserted –
“Permitted Activities (Regulation 9C):
(1) A debenture trustee may undertake:
(a) activities under any other financial sector regulator, in accordance with regulations or guidelines of such regulator; and/or
(b) fee-based, non-fund-based activities in the financial services sector not regulated by SEBI or other regulators, through separate business units.

Provided that a debenture trustee regulated by RBI shall carry out its trustee activities through a separate business unit.
Provided further that trustees already registered under these regulations shall transfer their activities to separate business units within six months of this amendment, or within an extended period as may be specified.

Explanation: “Financial sector regulator” includes RBI, IRDAI, PFRDA, IFSCA, IBBI, Ministry of Corporate Affairs, and others specified by SEBI.
(2) The trustee’s net worth shall be ring-fenced from any adverse impact arising from these activities.”

(3) Regulation 14 substituted to align trust deed requirements with Regulation 18(1) of the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021, and Form SH-12 under the Companies (Share Capital and Debentures) Rules, 2014. Deviations are allowed only if accompanied by a key summary sheet of deviations and rationale in the offer documents.

(4) Regulation 15(5) omitted.

(5) Regulation 15A inserted to empower debenture trustees with operational rights:
(1) Trustees may inspect issuer’s books and trust property to discharge their duties.
(2) They may call for information or documents from the issuer or intermediaries as specified by SEBI.
(3) Trustees may utilise the Recovery Expense Fund with the consent of debenture holders, in the manner specified by SEBI.