SEBI Isues Updated Master Circular for Debenture Trustees

Circular No. SEBI/HO/DDHS-PoD-1/P/CIR/2025/117; Dated: 13.08.2025

SEBI Issues Updated Master Circular for Debenture Trustees

The Securities and Exchange Board of India (SEBI) has released an updated master circular for Debenture Trustees (DTs), consolidating all relevant circulars issued up to August 13, 2025. This initiative is part of SEBI’s efforts to simplify regulatory references and provide stakeholders with a single point of access to compliance requirements.

Key Provisions on Due Diligence and Disclosures

The master circular lays down detailed norms relating to due diligence obligations of debenture trustees. It also specifies requirements for disclosures to be made on the official websites of DTs, ensuring greater transparency for investors and issuers. These provisions aim to strengthen accountability and build investor confidence in the corporate bond market.

Mechanism for Grievance Redressal and Compliance Reporting

To safeguard investor interests, the circular incorporates guidelines for redressal of investor grievances and mandates robust systems for regulatory compliance reporting by DTs. By strengthening monitoring and reporting frameworks, SEBI seeks to enhance market discipline and protect the interests of debenture holders.

Outsourcing, Security, and Covenant Monitoring Framework

The circular also covers provisions on the outsourcing of activities by debenture trustees, along with measures relating to security creation and a structured covenant monitoring system. These frameworks are designed to ensure that trustees fulfill their fiduciary responsibilities effectively, while also maintaining oversight on outsourced functions and monitoring issuer obligations.

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