**Executive Summary**
This circular, dated November 25, 2025, from the Securities and Exchange Board of India (SEBI) clarifies the terms and conditions for Debenture Trustees (DTs) to undertake activities outside the purview of SEBI, as per amendments to the SEBI (Debenture Trustees) Regulations, 1993. It introduces regulation 9C and specifies requirements for DTs undertaking non-SEBI regulated activities. The circular comes into force immediately and requires compliance reporting within six months.
**Key Points / Main Content**
* **Permitted Activities (Regulation 9C):**
* DTs may undertake activities under the purview of other financial sector regulators.
* DTs may undertake fee-based, non-fund based activities pertaining to the financial services sector that do not fall under the purview of SEBI.
* **Conditions for Activities Not Regulated by SEBI:**
* Activities must be conducted at arm's length through separate business units (SBUs), segregated by a Chinese Wall.
* A separate grievance redressal mechanism must be established.
* Separate records must be maintained within the SBU.
* Staff engaged in non-SEBI regulated activities should be distinct, with exceptions for key managerial personnel.
* IT infrastructure may be shared subject to board approval.
* DTs must disclose a list of non-SEBI regulated activities on their website within 30 days, along with a disclaimer regarding the non-availability of SEBI investor protection.
* If regulated by another Financial Sector Regulator (FSR), the FSR's name and compliance with its framework must be disclosed.
* Advertising and marketing material for non-SEBI regulated activities must be separate.
* Upfront written disclosure is required before undertaking non-SEBI regulated activities.
* For existing arrangements, disclosures and confirmation from stakeholders are required.
* **Compliance and Reporting:**
* DTs must obtain confirmation from stakeholders regarding the nature of non-SEBI regulated activities.
* A compliance report must be submitted to the Board within six months.
* DTs must submit an undertaking, as part of the half-yearly compliance report, confirming compliance with Regulation 9C and the circular's provisions.
* **Specific Provision for RBI Regulated DTs:**
* DTs also regulated by the Reserve Bank of India (RBI) must conduct DT activities through SBUs and comply with the conditions specified in the circular.
**Impact Analysis**
**Debenture Trustees (DTs)**
* **Impact**
Required to comply with new regulations regarding activities outside SEBI's purview.
* **Action Required**
Establish SBUs, implement separate grievance mechanisms, maintain separate records, provide disclosures, obtain confirmations from stakeholders, and submit compliance reports.
**Clients, Beneficiaries, and Counterparties of DTs**
* **Impact**
Need to be informed about the nature, risks, and non-availability of SEBI investor protection for non-SEBI regulated activities.
* **Action Required**
Acknowledge and confirm their understanding of the nature and risks of the activities at the time of engagement.
**Securities and Exchange Board of India (SEBI)**
* **Impact**
Increased regulatory oversight of activities of DTs.
* **Action Required**
Review and approve compliance reports submitted by DTs.
**Reserve Bank of India (RBI)**
* **Impact**
Entities under their purview must adhere to additional regulations regarding activities outside SEBI’s purview.
* **Action Required**
Ensure that DTs also regulated by the RBI comply with the specified SBU requirements.
Key Entities Referenced
Securities and Exchange Board of India (SEBI): The primary regulator impacting the scope of the circular, dictating which activities are inside or outside its purview.
SEBI (Debenture Trustees) Regulations, 1993: The main regulations being amended and interpreted, defining the activities of Debenture Trustees.
Debenture Trustees: The entities directly regulated by the circular, specifying conditions for activities.
Regulation 9C of the DT Regulations: The specific regulation being added to bring clarity on permissible activities for debenture trustees.
Reserve Bank of India: Financial sector regulator that impacts the circular’s applicability for Debenture Trustees.
CIRCULAR
HO/17/11/12(3)2025-DDHS-POD1/ I/146/2025 November 25, 2025
To,
All Registered Debenture Trustees,
Recognized Stock Exchanges
Dear Sir/ Madam,
Sub: Specification of the terms and conditions for Debenture Trustees for carrying out
activities outside the purview of SEBI
1. On October 27, 2025, amendments to the SEBI (Debenture Trustees) Regulations, 1993
(‘DT Regulations’) were notified, whereby regulation 9C was incorporated, to bring clarity
on the permitted activities for a DT. The sub-regulation 1 of the said regulation 9C,
provides as follows:
“Permitted Activities.
9C. (1) A debenture trustee may also undertake:
(a) activities which fall under the purview of any other financial sector regulator
specified by the Board, in accordance with the regulations or guidelines issued by
such financial sector regulator; and/ or
(b) activities that do not fall under the purview of the Board or any other financial
sector regulator, which shall be fee-based, non-fund based and pertain to the
financial services sector;
on an arms-length basis through separate business units of such debenture trustee,
in such a manner and subject to such other conditions as may be specified by the
Board:
Provided that a debenture trustee which is also regulated by the Reserve Bank of
India, shall carry out the activity of debenture trustee through separate business unit
of such debenture trustee:
Provided further that a debenture trustee that already holds a certificate of registration
under these regulations may transfer its activities, to separate business unit (s), within
a period of six months from the notification of the Securities and Exchange Board of
India (Debenture Trustee) (Amendment) Regulations, 2025 in the Official Gazette, or
such extended period that the Board may specify.
Explanation: — For the purpose of this regulation, the expression “financial sector
regulator” shall mean the Reserve Bank of India, the Insurance Regulatory and
Development Authority of India, the Pension Fund Regulatory and Development
Page 1 of 3Authority, the International Financial Services Centres Authority, the Insolvency and
Bankruptcy Board of India, the Ministry of Corporate Affairs and such other authorities
as may be specified by the Board.”
2. In this regard, the conditions for DTs to undertake activities that are not regulated by SEBI,
are given below:
2.1. The DT shall undertake such activities that are not regulated by SEBI only at arms’
length basis through one or more Separate Business Unit (SBU) of the DT,
segregated by a Chinese Wall and ring-fenced from the SEBI regulated activities.
2.2. The DT shall ensure that the grievance redressal mechanism including escalation
mechanism, if any, with respect to activities not regulated by SEBI, is separate and
distinct from the grievance redressal mechanism provided for activities regulated by
SEBI and is part of the SBU.
2.3. The DT shall prepare and maintain separate records in the SBU, for the non-SEBI
regulated activities.
2.4. The staff of the DT engaged in the non-SEBI regulated activities, should be distinct
from the staff handling activities regulated by SEBI. However, the staff can cross the
Chinese Wall, subject to due procedures approved by the board of directors of the
DT. Such Chinese Wall shall not be applicable for the key managerial personnel.
2.5. The other resources including the information technology infrastructure may be
shared between the activities regulated by the Board and activities that are not
regulated by the Board subject to due procedures approved by the board of directors
of the DT.
2.6. The DT shall duly disclose on its website, the list of the activities that are not SEBI
regulated, along with a disclosure that none of the SEBI investor protection
mechanism will be available for any grievances or disputes arising out of or pertaining
to such activities. A DT undertaking such activities, as on the date of this circular, shall
make the said disclosure on its website, within thirty days from the date of this circular.
2.7. If the DT undertakes activity regulated by other Financial Sector Regulator (FSR), the
name of the relevant FSR should also be specified in disclosures to relevant
stakeholders. Further, the DT shall comply with the regulatory framework, if any, as
may be specified by the respective FSR for the matters relating to policy, eligibility
criteria, risk management, investor grievance or dispute handling mechanism,
inspection, enforcement and claims.
2.8. The DT shall ensure that its advertising or marketing material and its webpage
displaying information pertaining to non-SEBI regulated activities, shall be separate
and distinct from SEBI-regulated activities.
2.9. Before undertaking any activities which are not regulated by SEBI, there shall be an
upfront written disclosure by the DT, as mentioned at paragraph 2.6 and 2.7 above,
Page 2 of 3to the relevant stakeholders including clients, beneficiaries and counterparties. The
said disclosure shall be made, on all engagement letters, contracts, agreements, and
business communication that such activities do not fall within the regulatory purview
of SEBI. In this regard, confirmation shall also be obtained from the stakeholders, at
the time of engagement, that they have understood the nature of the activity, risks
involved and non-availability of any SEBI investor protection mechanism.
2.10. For the existing and ongoing arrangements w.r.t the non-SEBI regulated activities, a
DT shall make disclosures, as mentioned at paragraph 2.6 and 2.7 above, and obtain
confirmation/ acknowledgement from the stakeholders including clients, beneficiaries
and counterparties, and submit a compliance report to the Board, within a period of
six months from the date of this circular.
2.11. The DT undertaking any activity not regulated by SEBI shall ensure that, in respect of
activities not regulated by the Board, it submits an undertaking as part of the half-
yearly compliance report confirming compliance with the requirements of regulation
9C of the DT Regulations and the provisions of this circular, duly reviewed and
approved by its board of directors.
3. Further, as specified in the first proviso to regulation 9C(1) of the DT Regulations, a DT
which is also regulated by the Reserve Bank of India, shall carry out the activity of DT
through SBUs of such DT. Therefore, the terms and conditions specified at paragraph 2
above shall be complied with by such SBU.
4. The circular shall come into force with immediate effect.
5. This circular is issued in exercise of powers conferred under Section 11(1) of Securities
and Exchange Board of India Act, 1992 and Regulation 2A of SEBI (Debenture Trustees)
Regulations, 1993, to protect the interest of investors in securities and to promote the
development of, and to regulate, the securities market.
6. This circular is available on the website of the Securities and Exchange Board of India at
www.sebi.gov.in under the category “Legal” and under the drop down “Circulars”.
7. This circular is issued with the approval of the competent authority.
Yours faithfully,
Divya Hamirbasia
Deputy General Manager
Department of Debt and Hybrid Securities
Tel No. - 022-2644-9293
Email ID - divyah@sebi.gov.in
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