Sebi gives more time for segregation of non-regulated activities by Debenture Trustees

Sebi on Tuesday extended the deadline by six months till October 27 for debenture trustees to comply with the mandate to segregate activities that fall outside the market watchdogs regulatory ambit. In October 2025, Sebi amended the Debenture Trustee rules, stipulating that a debenture trustee holding a valid certificate of registration may transfer its non-Sebi-regulated activities to separate business units within six months.

Sebi on Tuesday extended the deadline by six months till October 27 for debenture trustees to comply with the mandate to segregate activities that fall outside the market watchdog's regulatory ambit. The move came after Sebi received an industry push highlighting operational challenges in establishing the necessary systems and processes for effective implementation. In its circular, Sebi said, ''It has been decided to grant an additional six months for compliance by the Debenture Trustees (DTs). Accordingly, DTs will implement the framework's provisions by October 27, 2026. In October 2025, Sebi amended the Debenture Trustee rules, stipulating that a debenture trustee holding a valid certificate of registration may transfer its non-Sebi-regulated activities to separate business unit(s) within six months. Subsequently, the operational framework, including the terms and conditions governing activities undertaken by debenture trustees, was prescribed the following month. Under the framework, DTs shall undertake activities not regulated by Sebi only on an arms' length basis through one or more separate business unit of the DT, segregated by a Chinese Wall and ring-fenced from the Sebi-regulated activities.