The Securities and Exchange Board of India (SEBI) on November 25, 2025, issued a circular regarding the specification of the terms and conditions for Debenture Trustees for carrying out activities outside the purview of SEBI.
The conditions for DTs to undertake activities that are not regulated by SEBI, are given below:
• 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.
• 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.
• The DT shall prepare and maintain separate records in the SBU, for the non-SEBI regulated activities.
• 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.
• 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.
• 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.
• 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.
• 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.
The circular shall come into force with immediate effect.
[Circular No. HO/17/11/12(3)2025-DDHS-POD1/ I/146/2025]
