Sebi Extends Deadline for Debenture Trustees to Segregate Non-Regulated Activities

Sebi Extends Deadline for Debenture Trustees to Comply with Regulatory Mandate

The Securities and Exchange Board of India (Sebi) has extended the deadline for debenture trustees to comply with a regulatory mandate, granting them an additional six months to segregate activities outside of Sebi's regulatory ambit.

According to Sebi's circular, the new deadline for debenture trustees (DTs) to comply with the framework is October 27, 2026. This extension comes after the industry highlighted operational challenges in establishing the necessary systems and processes for effective implementation.

Sebi amended the Debenture Trustee rules in October 2025, stipulating that a debenture trustee holding a valid certificate of registration must transfer its non-Sebi-regulated activities to a separate business unit within six months. The operational framework, including the terms and conditions governing activities undertaken by debenture trustees, was prescribed the following month.

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Under the framework, debenture trustees are required to undertake activities not regulated by Sebi on an arms' length basis through one or more separate business units, segregated by a Chinese Wall and ring-fenced from Sebi-regulated activities.

Note: The comparison between the original and new deadlines is presented in the table above for clarity.