SEBI Constitutes Expert Working Group to Review Debenture Trusteeship Regulatory Framework

The Securities and Exchange Board of India has constituted an Expert Working Group to undertake a comprehensive review of the extant regulatory framework applicable to Debenture Trusteeship activities, as announced vide Press Release No. 37/2026, dated 30th June 2026.

Background and Rationale

The SEBI (Debenture Trustees) Regulations, 1993 have governed the conduct and responsibilities of Debenture Trustees for over three decades. Since their introduction, the Indian debt market has undergone significant transformation — most notably the introduction of the Insolvency and Bankruptcy Code, 2016, and a marked increase in investor participation in the corporate bond market. Given the growing importance of Debenture Trustees in safeguarding the interests of debenture holders, SEBI has determined that a comprehensive realignment of the regulatory framework is warranted to reflect these changed market dynamics.

Constitution and Leadership of the Working Group

The Expert Working Group has been constituted under the Chairmanship of Mr. Ananta Barua, Former Whole Time Member, SEBI, with Shri Rajnish Kumar, Former Chairman, State Bank of India, serving as Co-Chairperson.

The full composition of the Working Group is as follows:

• Mr. Ananta Barua, Former Whole Time Member, SEBI (Chairperson)
• Shri Rajnish Kumar, Former Chairman, State Bank of India (Co-Chairperson)
• Dr. O.N. Ravi, Former General Counsel and Executive Vice President, CCIL
• Mr. Rahul Choudhary, MD & CEO, Axis Trustee Services Limited
• Mr. Pratapsingh Nathani, MD & CEO, Beacon Trusteeship Limited
• Mr. Ashish Pahariya, Partner, DSK Legal
• Mr. Vinod Kothari, Partner, Vinod Kothari & Co.
• Representative, Finance Industry Development Council (FIDC)
• Mr. Ajit Nath Jha, Vertical Head – Treasury & Resource Management, SIDBI
• Mr. Pranjal Sharma, Director, The CFO Board
• Mr. Mehul Pandya, MD & Group CEO, CareEdge Ratings
• Mr. Debashis Bandyopadhyay, Chief General Manager, SEBI (Member Secretary)

The composition reflects a deliberate mix of former regulators, banking leadership, practicing trusteeship firms, legal practitioners, and industry bodies, indicating that the review is intended to be both practitioner-informed and institutionally grounded.

Terms of Reference

The Working Group has been tasked with the following terms of reference:

1. To undertake a comprehensive review of the existing regulatory framework governing Debenture Trustees, including the SEBI (Debenture Trustees) Regulations, 1993.
2. To examine representations and suggestions received from market participants.
3. To recommend measures to strengthen the role of Debenture Trustees for effective discharge of their responsibilities.
4. To review the net-worth requirements applicable to Debenture Trustees and suggest changes, if required.
5. To examine any other relevant matter or matters related to debenture trusteeship activities.

The inclusion of a specific mandate to review net-worth requirements signals that capital adequacy norms for Debenture Trustees may be revisited, which could have direct implications for existing and prospective trusteeship entities.

Public Consultation

SEBI has invited suggestions from the public, market participants, and other stakeholders on the existing regulatory framework governing Debenture Trustees. Suggestions are invited on matters including simplification, rationalisation, and strengthening of the regulatory framework, and may cover areas such as streamlining of existing provisions, removal of redundancies, updating of regulations in line with market developments, enhancement of the role and responsibilities of Debenture Trustees, and ease of compliance.

Suggestions are to be submitted in the format prescribed by SEBI, referencing the specific Regulation number of the SEBI (Debenture Trustees) Regulations, 1993, or the relevant circular or guideline, along with the suggestion and its rationale. The last date for submission of suggestions is July 15, 2026, and suggestions may be emailed to rohitd@sebi.gov.in and rinkig@sebi.gov.in.

Why This Matters

Debenture Trustees occupy a critical position in the corporate bond market, particularly in monitoring security cover, enforcing security in the event of default, and representing the interests of debenture holders in insolvency proceedings under the IBC. A review of this scale — spanning the regulatory framework itself, the net-worth eligibility bar, and the operational responsibilities of trustees — has the potential to reshape the trusteeship industry's structure and standards of accountability.

Debenture Trustees, corporate issuers, legal advisors, and other stakeholders in the debt capital markets should consider using this consultation window to submit representations, particularly on provisions that have posed practical compliance challenges under the existing 1993 Regulations.

This overview is based on SEBI Press Release No. 37/2026, dated June 30, 2026. Stakeholders intending to submit suggestions should refer to the complete press release for the prescribed format and submission requirements.