The Securities and Exchange Board of India (SEBI) has constituted an Expert Working Group to undertake a comprehensive review of the regulatory framework governing debenture trustees, citing the evolving debt market and the growing importance of trustees in safeguarding investor interests.
Need for Review
In a press release, SEBI stated: "Considering the evolving landscape of the Indian debt market and the increasing importance of Debenture Trustees in safeguarding the interests of debenture holders, a need has been felt to undertake a comprehensive review of the regulatory framework governing Debenture Trusteeship activities to align the same with the changing market dynamics."
The regulator noted that the SEBI (Debenture Trustees) Regulations, 1993 predate key market changes. "Since the introduction of the SEBI (Debenture Trustees) Regulations, 1993, the financial sector has undergone significant transformation, including the introduction of the Insolvency and Bankruptcy Code, 2016 and the growing participation of investors in the corporate bond market," it said.
Composition of the Expert Working Group
The Expert Working Group will be chaired by Ananta Barua, Former Whole Time Member of SEBI, with Rajnish Kumar, Former Chairman of State Bank of India, as Co-Chairperson. Other members include:
- Dr. ON Ravi, Former General Counsel and Executive Vice President, CCIL
- Rahul Choudhary, MD & CEO, Axis Trustee Services Limited
- Pratapsingh Nathani, MD & CEO, Beacon Trusteeship Limited
- Ashish Pahariya, Partner, DSK Legal
- Vinod Kothari, Partner, Vinod Kothari & Co.
- Ajit Nath Jha, Vertical Head - Treasury & Resource Management, SIDBI
- Pranjal Sharma, Director, The CFO Board
- Mehul Pandya, MD & Group CEO, CareEdge Ratings
- Debashis Bandyopadhyay, Chief General Manager, SEBI as Member Secretary
- A representative from the Finance Industry Development Council
Terms of Reference
The terms of reference include a comprehensive review of the existing SEBI DT Regulations; examining representations and suggestions from market participants; recommending measures to strengthen the role of debenture trustees; reviewing net-worth requirements applicable to trustees and suggesting changes; and examining any other relevant matters related to debenture trusteeship activities.
Public Consultation
SEBI is also seeking wider stakeholder input. The regulator has invited suggestions from the public, market participants and other stakeholders on the existing framework, "including measures for simplification, rationalisation and strengthening of the regulatory framework." Areas for feedback include streamlining provisions, removing redundancies, updating regulations in line with market developments, enhancing trustee roles and responsibilities, and easing compliance.
Market Context
The review comes as corporate bond markets deepen and retail participation grows, making effective trustee oversight critical for investor protection and market confidence.
