SEBI Initiates Regulatory Overhaul of Debenture Trusteeship Framework

The Securities and Exchange Board of India has established an Expert Working Group to reassess regulations for debenture trustees. Given changes in the debt market and trustees' increased role in investor protection, SEBI sees a need to update the 1993 regulations. The group invites public feedback to streamline and enhance the framework.

The Securities and Exchange Board of India (SEBI) has announced the formation of an Expert Working Group tasked with a comprehensive overhaul of the regulatory framework for debenture trustees. This move responds to the dynamic evolution of the Indian debt market and the heightened importance of trustees in safeguarding investor interests.

The existing SEBI (Debenture Trustees) Regulations, established in 1993, are considered outdated given significant transformations in the financial sector, such as the introduction of the Insolvency and Bankruptcy Code, 2016, and increased investor involvement in the corporate bond market. The group's leadership comprises Ananta Barua, former SEBI Whole Time Member, and Rajnish Kumar, former SBI Chairman, alongside other industry experts.

The group will evaluate the SEBI DT Regulations, address market participant inputs, propose enhancements for trustee roles, assess trustee net-worth requirements, and consider other related matters. SEBI is actively seeking contributions from the public and stakeholders to simplify and strengthen the regulatory framework in alignment with contemporary market trends.