SEBI Mandates Standard Trust Deed Format for Debt Issuers and Debenture Trustees

Notification no. No. SEBI/LAD-NRO/GN/2025/268; Dated: 22.10.2025

1. Background

The Securities and Exchange Board of India (SEBI) has notified the SEBI (Issue and Listing of Non-Convertible Securities) (Amendment) Regulations, 2025, introducing important modifications to Regulation 18 relating to the ‘Trust Deed’ for debt issuances.

The amendment aims to bring uniformity, transparency, and accountability in the execution of trust deeds between issuers and debenture trustees for non-convertible securities.

2. Key Amendment – Regulation 18 on Trust Deed

Under the revised provision, it is now mandatory for:

• The issuer and the debenture trustee to execute the trust deed in a format specified by SEBI.
• This ensures standardisation in the structure and content of trust deeds across all public and private debt issues.

3. Provision for Deviation from the Standard Format

While SEBI has prescribed a standard trust deed format, a flexibility clause has been introduced to accommodate case-specific requirements.
Accordingly:

• If any deviation is made from the prescribed format, the debenture trustee may accept such a deviation only if a key summary sheet highlighting the deviations is provided.
• This summary sheet must be included in any of the following offer documents:

1. 1. General Information Document (GID),
   2. Key Information Document (KID), or
   3. Shelf Prospectus.

This provision ensures disclosure-based transparency, enabling investors and stakeholders to easily identify and assess any differences from the SEBI-specified trust deed structure.

4. Objective of the Amendment

The amendment seeks to:

• Promote standardisation and comparability of trust deeds across issuers,
• Ensure clarity and consistency in contractual terms governing debenture issues,
• Safeguard investor interests through enhanced transparency, and
• Streamline regulatory oversight for debenture trustees and issuers.

5. Impact on Market Participants

• Issuers must now align their documentation processes with the SEBI-specified format to ensure compliance.
• Debenture Trustees will have a clearer framework for evaluating trust deed clauses and identifying deviations upfront.
• Investors benefit from improved access to consistent, summarised information about the legal terms protecting their interests.

6. Conclusion

The amendment to Regulation 18 under the SEBI (Issue and Listing of Non-Convertible Securities) (Amendment) Regulations, 2025 represents a crucial step toward strengthening governance, disclosure, and investor protection in India’s corporate bond market.

By enforcing a standardised trust deed format and mandating transparency for deviations, SEBI reinforces its commitment to robust and uniform debt market practices.

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