SEBI Update - Extension of timeline for compliance with terms and conditions by Debenture Trustees (DTs) for carrying out activities outside the purview of SEBI

Extension of SBU Compliance Timeline for Debenture Trustees

Circular No. HO/(201)2026-DDHS-POD1/I/24467/2026 | October 27, 2026
Issued by: Department of Debt and Hybrid Securities, SEBI

1. Background & Regulatory Context

In October 2025, SEBI amended the SEBI (Debenture Trustees) Regulations, 1993 (“DT Regulations”) introducing Regulation 9C, which requires Debenture Trustees (DTs) holding a valid certificate of registration to transfer activities not regulated by SEBI to Separate Business Units (SBUs). The original deadline for compliance was six months from the date of notification of the Amendment Regulations in the Official Gazette.

2. Operational Framework

The detailed terms and conditions governing DT activities under the SBU framework were specified vide SEBI Circular dated November 25, 2025 (Circular No. HO/17/11/12(3)2025-DDHS-POD1/I/146/2025). This circular laid down the operational mechanics for implementing Regulation 9C.

3. First Extension — April 2026

Following representations from the industry highlighting operational challenges in establishing the requisite systems and processes, SEBI vide Circular dated April 28, 2026 granted DTs an additional six months, extending the compliance deadline to October 27, 2026.

4. Expert Working Group (EWG) — June 2026

In June 2026, SEBI constituted an Expert Working Group (EWG) to comprehensively review the extant regulatory framework applicable to debenture trusteeship activities, including matters related to the SBU framework and other incidental aspects.

5. Second Extension — Present Circular

Considering:

The EWG’s ongoing comprehensive review of the DT regulatory framework including SBU-related guidelines; and
Further representations received from DT Associations citing implementation challenges,
SEBI has granted a further extension of six months, revising the compliance deadline to April 27, 2027.

All other provisions of the November 25, 2025 circular remain unchanged.

6. Legal Basis

Issued under Section 11(1) of the SEBI Act, 1992 and Regulation 2A of the SEBI (Debenture Trustees) Regulations, 1993.