TaxTMI 
TaxTMI 
Master Circular for Debenture Trustees
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....ance of this Master Circular, the Master Circular dated August 13, 2025 shall stand rescinded. Notwithstanding such rescission, - a) anything done or any action taken or purported to have been done or taken under the rescinded Master Circular, prior to such rescission, shall be deemed to have been done or taken under the corresponding provisions of this Master Circular; and b) any application made to the Board under the rescinded Master Circular, prior to such rescission, and pending before it shall be deemed to have been made under the corresponding provisions of this Master Circular. c) the previous operation of the rescinded Master Circular or anything done or suffered thereunder, any right, privilege, obligation or liability acquired, accrued or incurred under the rescinded Master Circular, any penalty, incurred in respect of any violation committed against the rescinded Master Circular, or any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty as aforesaid, shall not be affected by such rescission and shall be enforceable as if the rescinded Master Circular had continued to be in force. ....
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....entify and account for such direct credit in the SEBI account, Debenture Trustee shall provide the information to SEBI once the payment is made as per the format specified below: 5-31 Date Department of SEBI Name of Intermediary/ Other Entities Type of Intermediary SEBI Registration Number (if any) Permanent Account Number (PAN) Amount (in INR) Purpose of Payment (including the period for which payment was made e.g. quarterly, annually) Bank name and Account number from which payment is remitted UTR No. 2.3. The above information should be emailed to the respective department(s) as well as to the Treasury & Accounts division at [email protected]. 3. Grant of prior approval to Debenture Trustee for change in control: 3.1. Debenture Trustee is required to obtain prior approval of SEBI in case of change in control. With a view to expedite the process of granting prior approval, SEBI has adopted a 'single window clearance at SEBI', for the Debenture Trustees in case of their having multiple registrations with SEBI. 3.2. Therefore, in case a Debenture Trustee holds multiple registrations with SEBI, it shall make only one application addressed to "Chie....
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....eovers) Regulations, 2011, which, inter-alia, includes any spouse of that person, or any parent, brother, sister or child of the person or of the spouse. 4.3. Incoming shareholders in the Debenture Trustee, pursuant to transfer of shares from immediate relative/ transmission of shares (immediate relative or not), need to satisfy the fit and proper person criteria stipulated in Schedule II of the SEBI (Intermediaries) Regulations, 2008. 5. Transfer of business by SEBI registered intermediaries to other legal entity: SEBI has been receiving registration applications pursuant to transfer of business (SEBI regulated business activity) from one legal entity which is a SEBI registered Intermediary (transferor) to other legal entity (transferee). In this regard, following is clarified: 5.1. The transferee shall obtain fresh registration from SEBI in the same capacity before the transfer of business if it is not registered with SEBI in S=31 the same capacity. SEBI shall issue new registration number to transferee different from transferor's registration number in the following scenarios: a) Business is transferred through regulatory process (pursuant to merger/ am....
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....ion of designated email-id." c) The file shall contain the following details: Name Address Category Registration Designated email id Name of compliance officer No. S=31 8. Terms and conditions for Debenture Trustees for carrying out activities outside the purview of SEBI1: 8.1. 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 provision inter-alia stipulates that a debenture trustee holding a valid certificate of registration may transfer its activities that are not regulated by SEBI to separate business unit(s) within a period of six months from the date of notification of the SEBI (Debenture Trustees) (Amendment) Regulations, 2025 in the Official Gazette, or within such extended period as may be specified by the Board. 8.2. In this regard, the conditions for DTs to undertake activities that are not regulated by SEBI, are given below: a) 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....
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....tten disclosure by the DT, as mentioned at paragraph f) and g) above, to 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. j) For the existing and ongoing arrangements w.r.t the non-SEBI regulated activities, a DT shall make disclosures, as mentioned at paragraph f) and g) above, and obtain confirmation/ acknowledgement from the stakeholders including clients, beneficiaries and S=31 counterparties, and submit a compliance report to the Board, within a period of six months from the date of this circular. k) 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 ....
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....diaries) Regulations, 2008 while processing our request for surrender of certificate of registration. Thanking you, Yours faithfully, (Whole time/ Managing Director/ Principal Officer) *Please strike off, if not applicable. S=31 Chapter II: Due Diligence by Debenture Trustees 1. Appointment of Debenture Trustee: A Debenture Trustee shall ensure compliance with the provisions of the Regulations 13 and 13A of the DT Regulations with regard to being appointed as a Debenture Trustee in relation to an issue. 2. Due diligence in respect of secured debt securities: The Debenture Trustee shall ensure the following with regard to due diligence at the time of creation of security: 2.1. Documents/ Consents required at the time of entering into debenture trustee agreement: In order to enable the Debenture Trustee to exercise due diligence with respect to creation of security, the Issuer at the time of entering into debenture trustee agreement shall provide the following information/ documents to the Debenture Trustee: a) Details of assets, movable property and immovable property on which charge is proposed to be created including title deeds (original/ certi....
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....bsidiary/ associate company etc .; ii. Audited financial statements (not older than 6 months from the date of debenture trustee agreement) of guarantor including details of all contingent liabilities; iii. List of assets of the guarantor along-with undertakings/ consent/ NOC as per paragraphs 2.1(b) and 2.1(c) above; iv. Conditions of invocation of guarantee including details of put options or any other terms and conditions which may impact the security created; V. Impact on the security in case of restructuring activity of the guarantor; vi. Undertaking by the guarantor that the guarantee shall be disclosed as "contingent liability" in the "notes to accounts" forming part of the financial statements of the guarantor; vii. Copy of Board resolution of the guarantor for the guarantee provided in respect of the debt securities of the Issuer; S=31 viii. List of previously entered agreements for providing guarantee to any other person along with an undertaking that there are no agreements other than those provided in the list, if any. f) In case of any other contractual comforts/ credit enhancements provided for or on behalf of the issuer, it shall be required....
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....nts; and (B) Intimate existing charge holders through necessary and appropriate means (including via e-mail) about the proposal to create further charge on assets by Issuer seeking their comments/ objections, if any, to be communicated to the Debenture Trustee within next five working days. (b) In case of personal guarantee, corporate guarantee and any other guarantees/ form of security, the Debenture Trustee shall verify the relevant filings made on websites of Ministry of Corporate Affairs (MCA), Stock Exchange(s), CIBIL, IU, etc. and obtain appraisal report, necessary financial certificates from professionals as referred earlier in this Chapter. 2.2.3. A Debenture Trustee, by itself or by engaging professionals, shall prepare one or more reports viz. valuation report, ROC search report, title search report/ appraisal report, security cover certificate, any other report/ certificate as applicable etc. and shall independently assess that the assets for creation of security are adequate for the proposed issue of debt securities. 2.2.4. A Debenture trustee shall issue 'due-diligence certificate' to the Issuer, as per format specified in Annex-IIA of this Master....
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....estriction on the free and marketable title to the asset, by whatever name called, whether executed directly or indirectly; S=31 (c) Any covenant, transaction, condition or arrangement in the nature of encumbrance, by whatever name called, whether executed directly or indirectly. 2.5. Disclosures in the OD/ PM and filing of OD/ PM by the Issuer: 2.5.1. The Issuer, in addition to disclosures made under Schedule I of the NCS Regulations and circulars issued thereunder, shall also disclose the following in the OD/ PM: (a) "Debt securities shall be considered as secured only if the charged asset is registered with Sub-registrar and Registrar of Companies or CERSAI or Depository etc., as applicable, or is independently verifiable by the Debenture Trustee", and (b) Terms and conditions of Debenture Trustee Agreement including fees charged by Debenture Trustee, details of security to be created and process of due diligence carried out by the Debenture Trustee; and (c) Due Diligence Certificate as per the format specified in Annex-IIA of this Master Circular. 2.5.2. An Issuer proposing to make an issue of debt securities by way of a public issue or offer debt securi....
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....in the structure/ creation of security. c) Thereafter, the Issuer shall create the proposed security and the charge in favour of Debenture Trustee and the same shall be registered with the sub-registrar, ROC, CERSAI, Depository, etc., as applicable, within 30 days of creation of such charge. In case the charge is not registered anywhere or is not independently verifiable, then the same shall be considered as a breach of the covenants/ terms of the issue by the Issuer. d) Pursuant to the creation and registration of charge, the Issuer and Debenture Trustee shall enter into a supplemental/ amended debenture trust deed including all the terms and conditions arising out of the due diligence carried out by the Debenture Trustee as well as of the security created by Issuer. e) The Issuer, pursuant to execution of supplemental/ amended debenture trust deed, shall submit the following to the Depositories and Stock Exchanges: i. NOC by Debenture Trustee for change in security or creation of security. ii. Executed supplemental/ amended debenture trust deed; iii. An undertaking from the Debenture Trustee that the security has been created and registered. iv. Other documen....
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.... offer document with the stock exchanges, Issuer shall submit to the Stock Exchange(s), a Due Diligence Certificate obtained from the Debenture Trustee as per the format specified in Annex-IIC. 3.1.2. At the time of filing of listing application, Issuer shall submit to the Stock Exchange(s), a Due Diligence Certificate obtained from the Debenture Trustee as per the format specified in Annex-IID. 4 SEBI Circular No. SEBI/HO/DDHS/DDHS-PoD-3/P/CIR/2025/009 dated January 28, 2025 Annex-IIA FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY THE DEBENTURE TRUSTEE AT THE TIME OF FILING THE DRAFT OFFER DOCUMENT/ PLACEMENT MEMORANDUM To, Stock Exchange Dear Sir / Madam, SUB .: ISSUE OF BY LTD. We, the debenture trustee(s) to the above mentioned forthcoming issue state as follows: 1. We have examined documents pertaining to the said issue and other such relevant documents, reports and certifications. 2. On the basis of such examination and of the discussions with the Issuer, its directors and other officers, other agencies and on independent verification of the various relevant documents, reports and certifications, WE CONFIRM that: a) The Issuer has made adequa....
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....ion of charge. We have satisfied ourselves about the ability of the Issuer to service the debt securities. DEBENTURE TRUSTEE TO THE ISSUE WITH HIS STAMP Annex-IIC FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY THE DEBENTURE TRUSTEE AT THE TIME OFFILING OF DRAFT OFFER DOCUMENT/ PLACEMENT MEMORANDUM To, Stock Exchange Dear Sir/ Madam, SUB .: ISSUE OF BY LTD. We, the Debenture Trustee (s) to the above mentioned forthcoming issue state as follows: (1) We have examined documents pertaining to the said issue and other such relevant documents, reports and certifications. (2) On the basis of such examination and of the discussions with the issuer, its directors and other officers, other agencies and of independent verification of the various relevant documents, reports and certifications, WE CONFIRM that: a. All disclosures made in the offer document with respect to the debt securities are true, fair and adequate to enable the investors to make a well informed decision as to the investment in the proposed issue. b. Issuer has disclosed all covenants proposed to be included in debenture trust deed (including any side letter, accelerated payment clause et....
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.... security of the data on the system. 3.3. Share information with the other Depository for integrating and maintaining a compatible system. 5-31 3.4. Develop an alert mechanism to be sent to the stakeholders on submission, acceptance and rejection of information, and alerts for periodic and event based compliances. 3.5. Wherever necessary, provide the feature of document upload by the various stakeholders on the system. 3.6. Provide functionality of maintaining a trail/ log of all the communication/ interaction amongst various stakeholders viz. CRAs, Debenture Trustees, Issuers, Depositories etc. and also in the system on account of recording and/or verification and/or viewing of information by the stakeholders. 3.7. Provide functionality in the system to make changes in already recorded information by stakeholders (in case a change is required to be made for rectifying any discrepancy or recording additional information) and verification of same by responsible stakeholder (as applicable) and due logs/trail and prior versions of such changes. 3.8. Be responsible for the effective and smooth functioning of the system and shall develop a mechanism to establish acc....
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....able etc. on the system. 5.2. Recording of charge creation and charge registration details on the system: a) Pursuant to creation of charge in favour of Debenture Trustee (as per provisions of Chapter II), the Issuer shall upload the details of the charge created on the system as per Annex-IIIB of this Master Circular. The Issuer shall also upload all the relevant documents supporting the charge such as Pledge Master Report etc. b) The Debenture Trustee shall then validate the details of the charge entered in the system from Sub Registrar, ROC, CERSAI, Information Utility of IBBI or any other independently verifiable source and shall confirm the same on the system and update any subsequent changes, in case of any discrepancy. c) Pursuant to the issuance of due diligence certificate by the Debenture Trustee to the Stock exchange as per Annex-IIB of this Master Circular, the same shall be uploaded on the system by the Issuer. 5.3. Modification in the information recorded on the system: Any change in already recorded information on the system related to charge creation, registration details etc. due to any discrepancy or any modification in the value or details of th....
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....he security cover certificate. b) Update the value of the assets in the system based on the periodic valuation carried out by the Debenture Trustee, by itself or through professionals in terms of provisions of Chapter II of this Master Circular. c) Upload the title search reports, valuation reports etc., in terms of provisions of Chapter II of this Master Circular. S=31 d) The Debenture Trustee shall release charges in case any debt is repaid and update/ validate the same in the platform. C. Interest and redemption payment: 5.8. Interest and principal payment: a) The Issuer shall record information pertaining to payment of interest and repayment of principal on the system at the time of creation of ISIN/ temporary ISIN. The issuer shall also record the status of such payment/ repayment within one working day of payment/ redemption due date after taking requisite details from Registrar and Transfer Agent. The format for the same is as specified in Annex-IIIC of this Master Circular. b) Once such information is recorded on the system, the Debenture Trustee shall validate the status of such payment/ repayment in the system after receiving the requisite details ....
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....ame on system and CRAs shall update the correct information in the system within two working days of such notification. 6. Unique asset identifier: 6.1. As the backbone of the system is the uniqueness of the record of assets, a system generated unique identifier (Asset ID) shall be allotted for each asset offered by the Issuer as security for the debt securities. For data exchange and verification across Depositories, format for unique Asset ID shall be a 12-digit alphanumeric string, which will be generated as provided in Annex-IIID of this Master Circular. 6.2. To ensure that there is only one unique asset ID assigned to an asset of the issuer for effective asset creation as well as tracking, the system will provide an alert to the Issuer and the Debenture Trustee by having appropriate validation/ duplicate checks in the system for identifying possible duplicate entries for assets of an issuer and this validation/ duplication check shall be based on the parameters as per Annex-IIIE of this Master Circular. Issuers shall ensure that the entry of the asset is made only once in the system for generation of the unique Asset ID, which shall be verified by the Debenture Truste....
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....cial Asset f. Assignment of rights g. Guarantee viz personal corporate, corporate guarantee, government guarantee etc. 2. Details related to security offered - The required data to be to be filled along with supporting documents, wherever applicable: a. Asset description i. Asset name ii. Asset Details (in case of shares, it shall also include ISIN, Quantity, Pledgee Demat ID, Pledgee Instrument ID) iii. Asset Location (including address of the asset) iv. Asset ownership details b. Value of security offered: Issuer shall submit documents as required under Chapter II of this Master Circular and other documents given by Issuer for ascertaining the existence, veracity and value of assets. c. Documents related to existing encumbrance on assets/ security offered: S=3 Issuer shall record following details in the system and/ or submit documents: i. For unencumbered assets, an undertaking that the assets on which charge is proposed to be created are free from any encumbrances. ii. For encumbered assets, on which charge is proposed to be created, the Issuer shall submit documents in system as per para 2.1. (c) of Chapter II of this Master Circular a....
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....ยตร ยคยฟร ยคยจร ยคยฟร ยคยฎร ยคยฏ ร ยคยฌร ยฅโนร ยคยฐร ยฅยร ยคยก Securities and Exchange Board of India Item Details รยท Redemption due to CALL option (if any) . Quantity and Amount Redeemed รยท Due date for Redemption/ Maturity รยท Date of early Redemption (if any) 2. Issuers shall fill all the following requisite fields to update the status of payment within one working day of payment/ redemption date or a change in the due date of interest payment/ redemption payment as under: Updation by Issue on continuous basis - Payment of Interest รยท Actual Date for Interest Payment รยท Amount of interest paid รยท Date of last Interest Payment รยท Reason for non-payment/ delay in payment รยท Change in Frequency of payment (if any) รยท Date of Change รยท Details of such change รยท Change in Record Date Updation by Issue on continuous basis รขโฌโ Redemption payment รยท Actual Date for Redemption รยท Amount Redeemed รยท Outstanding Amount (Rs.) รยท Reason for non-payment/ delay in payment รยท Date of previous redemption (part redemption), if applicable รยท Change in Record Date Annex-IIID Asset ID = System Code + Asset Typ....
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....ntors in India c. For guarantors outside India i. Unique Identification Number provided by Regulator/ Authority of the host country ii. Issuing Regulator/ Authority d. Guarantee Amount S=3 Sr. Asset Type Asset Sub Parameters to compare for No. Type Duplicate check Personal a. Guarantor details such as Name of the company, address, net worth etc. b. PAN No for guarantors in India c. For guarantors outside India i. Passport Number ii. Passport Issuing Country d. Any other Unique Number provided by regulator of the host country along with name of the regulator. e. Guarantee Amount 5-31 Chapter IV: Recovery Expenses Fund In order to enable the Debenture Trustee to take prompt action for enforcement/legal proceedings in case of 'default' in listed debt securities, a 'Recovery Expense Fund' (REF) shall be created by issuer which shall be used by Debenture Trustee under guidelines provided below6. 1. Manner of creation and operation of REF 1.1. The issuer proposing to list debt securities shall deposit an amount equal to 0.01% of the issue size subject to maximum of Rs. 25 lakhs per issuer towards REF with the 'Des....
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....ee shall obtain prior consent of the holders of the debt securities and shall inform the same to the Designated Stock Exchange. 2.3. Debenture Trustee shall inform the Designated Stock Exchange to release the amount from the REF and submit an independent auditor's certificate regarding the expenses incurred to the Stock Exchange, which shall be verified by the Stock Exchange before release of the amount from the REF to the DT. 2.4. The Designated Stock Exchange shall release the amount lying in the REF to the Debenture Trustee/ Lead Debenture Trustee within five working days of receipt of such intimation. S=31 2.5. For the purpose of the provisions of this Chapter, Lead Debenture Trustee shall mean: a. A Debenture Trustee who is chosen as the Lead Debenture Trustee by other Debenture Trustees; or b. A Debenture Trustee who represents holders of more than 50% of the outstanding value of debt securities. 2.6. The Debenture Trustee shall keep a proper account of all expenses incurred out of the funds received from REF. 2.7. The Debenture Trustee shall on an annual basis update the debenture holders regarding the utilization of such funds. 3. Refund of R....
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....luation for asset classes offered as security by the Issuer shall be as under: a) In case of asset classes wherein frequency of valuation has been prescribed by SEBI, the market value shall be provided, accordingly, in the security cover certificate. b) For the asset classes wherein there is no regulatory guideline on frequency of the valuation of a specific asset class then it shall be on quarterly basis. 1.4. In case, the issuer has more than one Debenture Trustee for its listed debt securities, then the Issuer shall prepare such certificate separately for each Debenture Trustee. 1.5. The assets that are not paid for shall not be included as part of any security cover calculation. 1.6. In case security cover offered for the debt securities comprises the assets of the Issuer only, the security cover shall be prepared on standalone basis. 1.7. In case debt securities are secured by creation of charge on the assets of a third party/ subsidiary/ group/ holding company; or assets of the Issuer are offered for securing the debt securities issued by a third party/ subsidiary/ group/ holding company; or assets of the Issuer are offered for securing the other liabilities....
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....isted debt securities, then Debenture Trustees may choose a common independent professional for preparation of security cover certificate. 2.3. In case of reduction in the computed value of security cover in comparison to the previous quarter or previously calculated security cover, the Debenture Trustee shall record the reason for such variation in the security cover certificate. Clarification, if any, in this regard, may be obtained by Debenture Trustee from the Issuer. 3. Calculation of Security Cover Ratios In order to standardize calculation of security cover ratio as prescribed in Annex-VA of this Master Circular, the following formulas shall be used: 3.1. Exclusive security cover shall be calculated in the following manner: Security Cover = Value of assets having Exclusive charge outstanding value of corresponding debt + Interest accrued 3.2. Pari-passu security cover shall be calculated in the following manner: Pari-passu Security Cover = Value of assets having pari-passu charge outstanding value of corresponding debt + Interest accrued 4. Affixing Unique Document Identification Number (UDIN) to the security cover certificates: The sec....
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....her than Cash and Cash Equivalents Others Total LIABILITIES Debt securities to which this certificate pertains Other debt sharing paripassu charge with above debt Other Debt S=31 Subordinated debt not to be filled Borrowings Bank Debt Securities Others Trade payables Lease Liabilities Provisions Others Total Cover on Book Value Cover on Market Valueix Exclusive Security Cover Pari- Passu Security S=31 Ratio Cover Ratio i. This column shall include book value of assets having exclusive charge and outstanding book value of debt for which this certificate is issued. ii. This column shall include book value of assets having exclusive charge and outstanding book value of all corresponding debt other than column C. iii. This column shall include debt for which this certificate is issued having any pari-passu charge - Mention Yes, else No. iv. This column shall include a) book value of assets having pari-passu charge b) outstanding book value of debt for which this certificate is issued and c) other debt sharing pari-passu charge along with debt for which certificate is issued. V. This column shall include book value of all other as....
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....s on November 12, 2020 vide circular SEBI/HO/MIRSD/CRADT/CIR/P/2020/230, listed entities and debenture trustee(s) were given 120 days to enter into supplemental/amended debenture trust deed incorporating the changes in the debenture trust deed S=31 Reports/ Certificate Periodicity Net worth certificate of guarantor in case debt securities are secured by way of personal guarantee) Half yearly basis within 75 days from end of each half-year. Financials/ value of guarantor prepared on basis of audited financial statement etc. of the guarantor (secured by way of corporate guarantee) Annual basis within 75 days from end of each financial year. Valuation report and title search report for the immovable/ movable assets, as applicable. Once in three years within 75 days from the end of the financial year. 1.3. DTs are required to carry out due diligence on a continuous basis to protect the interest of the debenture holders in the manner as specified in the DT Regulations. Accordingly, in order to enable the DTs to perform their function efficiently and in a timely manner, the issuer shall submit the reports/ certificate to the Debenture Trustees as follows8: Reports/ Certifi....
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....licable to the particular issuance defining the frequency of each covenant to be monitored viz. continuous, quarterly, half-yearly, annual etc. The covenants may be categorized as financial covenants, affirmative covenants, negative covenants etc. A guidance notes for the list of covenants prepared in consultation with Debenture Trustees is enclosed as Annex-VIA of this Master Circular. c) Initiate action in case of breach of covenants viz. accelerated payment, borrowing restriction, not to declare dividend before payment, declaration of event of default, etc. in accordance with the terms of issue/ Offer Document/ Debenture Trust Deed. d) Independently monitor any breach of covenants from continuous monitoring of any public disclosure on Stock Exchange, company filings, news articles in electronic/ print media or any information available in public domain apart from periodical information/ documents submitted by the issuer. e) Furnish a status report on its website and to the Stock Exchange for further dissemination on a quarterly basis. Such status report shall contain the covenants breached in the preceding quarter and the actions taken by the Debenture Trustee for the s....
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....tes รยท Payment of principal on due dates 3. Affirmative รยท Security Cover as per terms of Issue รยท Title of Security/asset Covenant as to Ratio or percentage, not less than, third party interest/ title, rentals, negative lien, insurance, ROC and CERSAI filing etc. 4. Affirmative or restrictive รยท Credit rating รยท Credit downgrade Covenant as to minimum rating (Rating symbol), Standalone basis, consolidated, CE/SO rating, notch downgrade, etc. 5. Negative รยท Purpose/end-use รยท Change in nature and conduct of business รยท Change in management Fund raising/ borrowing/ encumbrance Change in Key Managerial Personnel (KMP), Auditor, Board of Directors, shareholding, restriction with amount, date till which applicable, any change or restriction with specifics, modification of charge/ creation of further charge, indebtedness/further investment etc. S=31 6. Default . Default of principal or interest or both รยท Security creation default Covenant as to extra interest payable, cure period allowed, investment allowed, additional infusion required etc. Chapter VII: Disclosures on the website of a Debenture Trustee 1. Disclosure by Debenture Trustee ....
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....ase the payment is made with a delay by the issuer, Debenture Trustee shall update the calendar specifying the date of such payment, with a remark 'delayed payment'. S=31 Annex-VIIA 1. Revision in Credit ratings: S. No. Name of the listed entity ISIN Immediate Previous Credit Rating Revised Credit Rating Credit Rating Date of Rating Credit Rating Agency Credit Rating Credit Rating Agency Date of Review Hyperlink of releases by rating Agency the the press Credit 2. Status of payment of interest/principal by the listed entity: S. No. Name of the listed entity ISIN Due Date of Payment of Interest/ Actual date of Payment of Interest/ Status of Payment (Default / Delayed / Date of information given to Date of information given to CRA by Details of action taken by debenture Principal Principal Non-Cooperation, Exchange by the the debenture No Information etc.) debenture trustee trustee trustee, if any S=31 3. Monitoring of Utilization Certificate and Security Cover: Name of the listed Issue Type Issue size (in Rs. Whether Secured/ Periodical status/ Utilization Certificate Security cover Certificate entity (Public/ Unsecured perform....
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....s regarding maintenance of accounts maintained under supervision of Debenture Trustee: a. Debenture Redemption Reserve/ Debenture Redemption/ maintenance of funds as per Companies (Share Capital and Debentures) Rules, 2014: S. Name of the Issue Type of Issue Size ISIN (that is Amount Status of maintenance of DRR Details of N o. Listed Entity Type (Public/ Privately placed listed) entity (NBFC/ HFC/FI/ Other) (in Rs. crores) maturing in the current FY) outstanding (15%/ 10% of the amount maturing in the year, applicable as per Companies (Share Capital and Debentures) Rules, 2014) action taken, if any S=31 b. Recovery expense fund S. N o. Name of the Listed Entity (including ISINs) Type of Issue (Public/ Privately Placed) Issue Size (in Size/ Value of recovery Any addition in the Recovery Details of usage of the funds, if any, during the Additional remarks Rs. crores) fund maintained Expense fund during the quarter quarter c. Accounts/ funds to be maintained in case of Municipal Debt Securities: S. No. Name of the Listed Entity Type of Issue (Public/ Privately Placed) Issue Size (in Rs. crores) Size/ Value of Fund/account maintained Action taken by debentu....
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.... Debenture Trustee shall have adequate systems to ascertain the status of payment of interest/ repayment of principal by the Issuer on due dates in timely manner and efficiently share such information with the CRAs which shall include the following: 3.1.1. The Debenture Trustee shall, at least seven days prior to the due date of payment of interest/ repayment of principal, seek ISIN-wise information from Issuers regarding the SZ31 status of payment of interest/ repayment of principal on or before the due date. While seeking such information, the Debenture Trustee shall also intimate to CRAs. 3.1.2. If the Issuer confirms the status of such payment/ repayment or where no information is received from the Issuer on or before the due date, the Debenture Trustee shall accordingly provide ISIN-wise information to the CRAs latest by one day after such due date which shall state the following: a) Information about payment made on or before the due date or; b) Information about delay/ default in payment or; c) No information forthcoming from the Issuer on the payment status. 3.1.3. In cases where the CRAs have been informed as per point no. 3.1.2 above that no inform....
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....by the Debenture Trustee promptly and in any case not later than next day of the occurrence of such events. S=31 Annex-VIIIA Sharing of information between Debenture Trustees and Credit Rating Agencies 1. Information from Credit Rating Agencies to Debenture Trustees: a) Rating assigned/revised for debt securities along with the rationale for the same. b) Press release, outstanding ratings etc. in respect of debt securities. c) Non-cooperation by the issuers with respect to sharing necessary information for monitoring the credit quality of the rated instrument with Credit Rating Agencies. d) Press release and separate communication to Debenture Trustee on withdrawal of rating post redemption of entire amount due towards. 2. Information from Debenture Trustees to Credit Rating Agencies: a) Whether the asset in respect of which security has been created is free from any encumbrance and adequate to ensure security cover for the debt securities or if there is any breach of the terms of creation of the security. This information shall be shared on a half yearly basis. b) Funds transferred to Debenture Redemption Reserve (DRR), depletion of the DRR /invoca....
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....to this Master Circular. 2. Exclusive e-mail ID to redress of Investor Complaints: SZ31 In order to address the issue of having a direct and quicker forum for enabling investors to register their complaints expeditiously, a Debenture Trustee shall designate an e-mail ID of the grievance redress division/ compliance officer exclusively for the purpose of registering complaints by investors. It shall display the email ID and other relevant details prominently on its website and in the various materials/ pamphlets/ advertisement campaigns initiated by it for creating investor awareness. 3. Redress of investor grievances through SEBI Complaints Redress System (SCORES) platform: 3.1. The Debenture Trustee shall send its details, in the format specified in Annex-IXC of this Master Circular to SEBI in hard copy and by email to [email protected] and obtain SCORES user id and password immediately within a period of one month from the date of registration. The email-id to be furnished by the Debenture Trustee for receiving SCORES user id and password from SEBI has to be preferably a corporate email id and necessarily a permanent one. Failure by any SEBI registered Debenture T....
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....mediary: Please contact Compliance Officer of the Intermediary (Name and Address) / email-id ([email protected]) and Phone No. - 91- XXXXXXXXXX. You may also approach CEO / Partner / Proprietor (Name) / email id ([email protected]) and Phone No. - 91-XXXXXXXXXX. If not satisfied with the response of the intermediary, you can lodge your grievances with SEBI at http://scores.gov.in or you may also write to any of the offices of SEBI. For any queries, feedback or assistance, please contact SEBI Office on Toll Free Helpline at 1800 22 7575 / 1800 266 7575 S=31 Annex-IXA INVESTOR CHARTER - DEBENTURE TRUSTEES 1. Vision and Mission Statement for Investors Vision: รยท Strive to protect the interest of investors in debt securities by acting as a trusted Debenture Trusteeship service provider. Mission: รยท To safeguard the interests of the investors in listed debt securities through adherence to regulatory guidelines. รยท To achieve highest level of operational efficiencies through well-defined internal processes and domain expertise. 2. Details of services provided by Debenture Trustee: รยท Facilitating documentation, exercising due diligence and t....
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....s maintained under supervision of debenture trustee 75 C. Status of information regarding any default by the Issuer and action taken by debenture trustee 75 d. Utilization Certificate submitted by the Issuer 75 Once in three years a. Valuation report and title search report for the immovable/movable assets, if any. 75 2. Other services/activities a. Providing copy of debenture trust deed to investor 7 b. Redress of Investor Grievances by Debenture Trustee 30 C. Notice to be issued by Debenture Trustees in case of change in terms of debt securities including rollover, redemption of debt securities etc. 15 4. Guidance pertaining to special circumstances: BREACH OF COVENANT AND/OR EVENT OF DEFAULT The Debenture Trustee shall take following steps in case of breach of covenants or terms of issue and/or event of default: a) send a notice to the investors within 3 days of breach of covenants or terms of issue and/or event of default. b) convene the meeting of investors within 30 days of breach of covenants or terms of issue and/or event of default. c) to enforce security or enter into the Inter Creditor Agreement or as decided in the meeting of investors. S=31....
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....vestor to mention following: a) Nature of Complaint b) Name of Issuer Company c) Holding details including ISIN d) Full Name of Debenture Holder e) PAN f) Correct Email ID 6.4 Upon receipt of the complaint, the Debenture Trustee after due verification shall send intimation of redress/ resolution of complaint via email / letter as applicable within the timeline. S=31 6.5 In case a complaint is required to be escalated to the issuer by the debenture trustee, the same shall be escalated within seven days of receipt of complaint. 6.6 If the investor is not satisfied with the redress/resolution of the complaint by the debenture trustee, or the issuer, investor can lodge the complaint on the SEBI Complaints Redress System - SCORES (https://scores.gov.in/) or harness the dispute resolution mechanism specified by SEBI from time to time with respect to the Issuer. Sz31 Annex-IXB Data of complaints against Debenture Trustee to be displayed on its website- Format for disclosing of data of complaints on its website: 1. Data for the month ending: S. No. Received from Carried forward from previous month Received during the month Total Pending # Resol ....
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.... S=31 Chapter X: Breach of Covenants, Default and Remedies 1. Event of default: 1.1.Regulation 51 read with the Explanation to Clause A (11) in Part B of Schedule III of the LODR Regulations defines 'default' as non-payment of interest or principal amount in full on the pre-agreed date which shall be recognized at the first instance of delay in the servicing of any interest or principal on debt. 1.2. In the manner of calling 'event of default', due to the presence of multiple ISINs which may have been issued under the same offer document or a single ISIN which may have been split across multiple offer documents it is clarified that 'event of default' shall be reckoned at the ISIN level, as all terms and conditions of issuance of security are same under a single ISIN even though it might have been issued under multiple offer documents. 2. Appointment of Director nominated by the Debenture Trustee on boards of issuers: 2.1. Regulation 23(6) of the NCS Regulations obligates an issuer which is a company under the Companies Act, 2013 to ensure that its Articles of Association requires its Board of Directors to appoint as director, the p....
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....tee shall send a notice to the investors within three days of the event of default by registered post/ acknowledgement due or speed post/ acknowledgement due or courier or hand delivery with proof of delivery as also through email as a text or as an attachment to email with a notification including a read receipt, and proof of dispatch of such notice or email, shall be maintained. 3.3.2. The notice shall contain the following: a) A provision for negative consent for proceeding with the enforcement of security; and b) A provision for positive consent for signing the ICA (in case the Debenture Trustee is approached by other lenders for signing/ joining the ICA); and c) the time period within which the consent needs to be provided, viz. consent to be given within 15 days from the date of notice; and S=31 d) the date of meeting to be convened. e) A disclosure to the effect that in case requisite consents are not received either for enforcement of security or for signing ICA, then the Debenture Trustee shall take further action, if any, as per the decision taken in the meeting of the holders of listed debt securities. 3.3.3. Debenture Trustee shall convene the me....
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....Exchange Board of India Act, 1992 and the rules, regulations and circulars issued thereunder from time to time. b) If the resolution plan imposes conditions on the Debenture Trustee that are not in accordance with the provisions of Companies Act, 2013 and the rules made thereunder, the Securities Contracts (Regulations) Act, 1956 and the Securities and Exchange Board of India Act, 1992 and the rules, regulations and circulars issued thereunder from time to time, then the Debenture Trustee shall be free to exit the ICA altogether with the same rights as if it had never signed the ICA. Under these circumstances, the resolution plan shall not be binding on the Debenture Trustee(s). c) The resolution plan shall be finalized within 180 days from the end of the review period. If the resolution plan is not finalized within 180 days from the end of the review period, then the Debenture Trustee shall be free to exit the ICA altogether with the same rights as if it had never signed the ICA and the resolution plan shall not be binding on the S=31 Debenture Trustee. However, if the finalization of the resolution plan extends beyond 180 days, the Debenture Trustee may consent to an ....
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.... to intimate the updated status of payment of the concerned debt securities within the stipulated timelines, the Debenture Trustee shall carry independent assessment as given at paragraph 1 above and intimate the status of payment of debt securities to the Stock Exchange and Depositories by the seventh working day of April of each financial year. 2.2. In case of any developments that impact the status of default of the debt securities (including restructuring of debt securities, NCLT/ NCLAT proceedings relating to insolvency/ S=31 bankruptcy, repayment, etc.), the Issuer/ Debenture Trustee shall intimate the Stock Exchanges and Depositories within one working day of such development. 2.3. The process explained above shall be followed either till full payment on these securities is made by the Issuer or the Issuer has been liquidated and money has been realised after completion of recovery proceedings. S=31 Chapter XII: Centralised Database - Responsibilities of Debenture Trustee Debenture Trustee shall access the database to verify the information regarding default history and other relevant information. In case of any discrepancy, Debenture Trustee shall notif....
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....rustee on the above issues d) Compliance with registration requirements: S=31 Certified that the requirements specified for SEBI registration as Debenture Trustee are fulfilled, the details are as under: i. Net worth (audited) as defined in the Regulations as on FY ended (as per the latest audited financials) ii. Any change in infrastructure since the last report/ registration/ renewal i. Changes in Key personnel during the half year ended. ) Name(s) of the key personnel Appointment / Cessation Date of appointment / cessation Qualification Experience e) Details of deficiencies and non-compliances f) Details of the review of the report by the Board of Directors: i. Date of Board Review (DD/MM/YYYY) ii. Observation of the Board of Directors on the deficiencies and non-compliances and corrective measures initiated , Certified that we have complied with SEBI (Debenture Trustee) Regulations, 1993 applicable provisions of SEBI (Issue and Listing of Non-convertible Securities) Regulations, 2021, Circulars issued by SEBI and any other laws applicable from time to time, other than the deficiencies and non-compliances reported by us at Section(e) above.....
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.... The Board shall mandate a regular review of outsourcing policy for such activities in the wake of changing business environment. It shall also have overall responsibility for ensuring that all ongoing outsourcing decisions taken by the Debenture Trustee and the activities undertaken by the third-party, are in keeping with its outsourcing policy. 2. The Debenture Trustee shall establish a comprehensive outsourcing risk management programme to address the outsourced activities and the relationship with the third party. 2.1 A Debenture Trustee shall make an assessment of outsourcing risk which depends on several factors, including the scope and materiality of the outsourced activity, etc. The factors that could help in considering materiality in a risk management programme include- a) The impact of failure of a third party to adequately perform the activity on the financial, reputational and operational performance of the Debenture Trustee and on the investors/ clients; S=31 b) Ability of the Debenture Trustee to cope up with the work, in case of non-performance or failure by a third party by having suitable back-up arrangements; c) Regulatory status of the third pa....
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....s arising out of activities rendered by the third party. 3.3 The facilities/ premises/ data that are involved in carrying out the outsourced activity by the service provider shall be deemed to be those of the registered Debenture Trustee. The Debenture Trustee itself and Regulator or the persons authorized by it shall have the right to access the same at any point of time. 3.4 Outsourcing arrangements shall not impair the ability of SEBI/ SRO or auditors to exercise its regulatory responsibilities such as supervision/ inspection of the Debenture Trustee. 4. The Debenture Trustee shall conduct appropriate due diligence in selecting the third party and in monitoring of its performance: 4.1 It is important that the Debenture Trustee exercises due care, skill, and diligence in the selection of the third party to ensure that the third party has the ability and capacity to undertake the provision of the service effectively. 4.2 The due diligence undertaken by an Debenture Trustee shall include assessment of: a) third party's resources and capabilities, including financial soundness, to perform the outsourcing work within the timelines fixed; b) compatibility of ....
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....enure of the contract and also after the expiry of the contract; g) specifies the responsibilities of the third party with respect to the IT security and contingency plans, insurance cover, business continuity and disaster recovery plans, force majeure clause, etc .; h) provides for preservation of the documents and data by third party; i) provides for the mechanisms to resolve disputes arising from implementation of the outsourcing contract; j) provides for termination of the contract, termination rights, transfer of information and exit strategies; k) addresses additional issues arising from country risks and potential obstacles in exercising oversight and management of the arrangements when Debenture Trustee outsources its activities to foreign third party. For example, the contract shall include choice-of-law provisions and agreement covenants and jurisdictional covenants that provide for adjudication of disputes between the parties under the laws of a specific jurisdiction; l) neither prevents nor impedes the Debenture Trustee from meeting its respective regulatory obligations, nor the regulator from exercising its regulatory powers; and m) provides for th....
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....te checks and balances to ensure the same. S=31 7.3 In cases where the third party is providing similar services to multiple entities, the Debenture Trustee shall ensure that adequate care is taken by the third party to build safeguards for data security and confidentiality. 8. Potential risks posed where the outsourced activities of multiple intermediaries are concentrated with a limited number of third parties. In instances, where the third party acts as an outsourcing agent for multiple intermediaries, it is the duty of the third party and the Debenture Trustee to ensure that strong safeguards are put in place so that there is no co-mingling of information /documents, records and assets. S=31 Chapter XV: Unauthenticated news circulated by SEBI registered market intermediaries through various modes of communication 1. It has been observed by SEBI that unauthenticated news related to various scrips are circulated in blogs/ chat forums/ e-mail etc. by employees of Broking Houses/ Other Intermediaries without adequate caution as mandated in the Code of Conduct. 2. Further, in various instances, it has been observed that the Intermediaries do not have proper i....
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....of the International Organisation of Securities Commissions (IOSCO) Objectives and Principles of Securities Regulations, it has been decided to put in place comprehensive guidelines to collectively cover such entities and their associated persons, for elimination of their conflict of interest, as detailed hereunder. 2. The Debenture Trustee shall adhere to these guidelines for avoiding or dealing with or managing conflict of interest. It shall be responsible for educating its associated persons for compliance of these guidelines. 3. For the purpose of these guidelines, "associated persons" have the same meaning as defined in Securities and Exchange Board of India Certification of Associated Persons in the Securities Markets) Regulations, 2007. 4. Debenture Trustee and its associated persons shall, 4.1. lay down, with active involvement of senior management, policies and internal procedures to identify and avoid or to deal or manage actual or potential conflict of interest, develop an internal code of conduct governing operations and formulate standards of appropriate conduct in the performance of their activities, and ensure to communicate such policies, procedures and ....
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....ecting suspicious transactions by the Debenture Trustees under Rule 7(3) of Prevention of Money Laundering (Maintenance of Records) Rules, 2005. 2. It has been informed by FIU-India that: 2.1. all Reporting Entities falling under Debenture Trustee segment registered in FINNET 1.0 system of FIU-India are required to re-register themselves in FINNET 2.0 system/ module10 ; and 2.2. those reporting entities who have not yet registered themselves with FIU-India are required to be registered in FINNET2.0 system/ module of FIU-India immediately in light of the FATF mutual evaluation. 3. In view of the above, all the SEBI registered debenture trustees are advised to register/ re- register themselves in FINNET 2.0 system of FIU-India as soon as possible. 9 SEBI Circular No. SEBI/HO/DDHS/DDHS-POD1/CIR/P/2023/67 dated May 09, 2023 10 FINNET 2.0 is the new reporting platform of FIU-India; for more details please refer to the following website- https://fiuindia.gov.in/files/misc/finnet2.html S=31 Glossary Term Description ATR Action Taken Report CERSAI Central Registry of Securitization Asset Reconstruction and Security Interest CIBIL Credit Information Bureau (Ind....