SEBI Proposes Changes to Debenture Trustee Regulations

SEBI has issued a consultation paper to clarify the term 'pecuniary relationship' for debenture trustees (DT) and proposed changes to related regulations. Stakeholders can comment until September 11. The proposal includes excluding DT remuneration from the 'pecuniary relationship' and mandates disclosing remuneration as a percentage of total revenue.

The Securities and Exchange Board of India (SEBI) on Wednesday proposed significant amendments to the regulations governing debenture trustees (DTs).

A consultation paper seeking stakeholder input has been released to clarify the 'pecuniary relationship' term under existing norms. Stakeholders have until September 11 to submit their feedback.

Currently, restrictions exist on appointing a DT if its pecuniary relationship with the issuer exceeds 2% of its gross turnover or Rs 50 lakh, whichever is lower. SEBI's working group recommends excluding DT remuneration from this calculation. Moreover, the paper proposes transparent disclosure of remuneration received by DTs as a percentage of total revenue from all issuer services.

(With inputs from agencies.)