The Securities and Exchange Board of India (SEBI) has extended the deadline for debenture trustees to comply with guidelines requiring activities not regulated by the market regulator to be housed in separate business units by six months to April 27, 2027.
Debenture trustees act as intermediaries between companies that raise money by issuing debt securities and investors who buy them. They monitor whether issuers meet their obligations and protect the interests of debenture holders, including by ensuring compliance with the terms of the issue and taking action in case of defaults.
A circular issued on Tuesday gives debenture trustees (DTs) additional time to establish the systems and processes needed to implement the separate business unit (SBU) framework. The earlier deadline was October 27, 2026.
SEBI said the extension follows representations from debenture trustee associations highlighting implementation challenges. The regulator has also constituted an expert working group to comprehensively review the regulatory framework governing debenture trusteeship activities, including the SBU framework.
The circular stated: “Considering that the EWG is undertaking a comprehensive review of the regulatory framework for DTs, including aspects related to the Separate Business Unit (SBU) framework, and further representations received from DT Associations highlighting the challenges in the implementation of SBU-related guidelines, it has been decided to grant an additional period of six months (i.e. upto April 27, 2027) to DTs for ensuring compliance with the said requirements”.