To increase transparency and clarify the framework, the Securities and Exchange Board of India has issued a master circular for Debenture Trustees (DTs). The master circular includes a broad number of guidelines and directions as a one stop shop, up to and including the date of August 13, 2025.
The master circular (No. SEBI/HO/DDHS-PoD-1/P/CIR/2025/117) aims to provide a streamlined set of guidelines to Debenture Trustees so they will hopefully have an easier time complying with the directive guidelines in order to strengthen the integrity of India's corporate debt market.
This master circular carefully organizes Debentures Trustee responsibilities into several primary sections, highlighting the Trustee's role as a key intermediary safeguarding the interest of debenture holders.
Due Diligence and Transparency
The circular again highlights the stringent due diligence requirements that the DTs must meet prior to, during and after debt issuance. In addition, it reinforces the importance of being transparent, which can include clear and timely disclosures on the DT's website. Therefore, investors will have access to all the information they need with regard to making an informed investment.
Protection and Grievance Redressal
A prime focus of the circular is the protection of investors. The circular outlines significant mechanisms for investors' grievance redressal, providing that investors have their issues dealt with properly and efficiently. More so, it requires systematic reporting of the DTs regulatory compliance to SEBI for enhanced regulatory scrutiny.
Operational Integrity and Monitoring
The circular outlines specific parameters for the outsourcing of activity by Debenture Trustees, safeguarding their core responsibilities from diluted oversight. It emphasizes the need for rigorous security and covenant monitoring, assuring that DT's are monitoring the issuer's compliance with the terms of the debenture trust deed, specifically the security created for the debentures.
The biggest advantage of this master circular is consolidation. By consolidating many circulars, SEBI has taken away the ambiguity and has created a single reference for all. Debenture Trustees will have an easier compliance process and issuers, investors and all market participants will have more clarity.
This action demonstrates SEBI's intent to create a more transparent, accountable and effective ecosystem for the corporate debt market, and recognises the Debenture Trustees' significant contribution to maintaining market confidence.
Knowing how to wade through the intricacies of such comprehensive regulations is the trick to ensuring flawless compliance. If you want to ensure your activities can be harmonised with the latest SEBI regulations then liaise with the professionals at FEMA Consultant for tailored assistance.