SEBI Allows 6-Month Extension for Debenture Trustees on Segregation Norms

The Securities and Exchange Board of India (SEBI) has extended the compliance deadline for debenture trustees to separate non-regulated activities, as per PTI reports. The new date is set at 27 October 2026.  

This gives trustees an additional 6 months to align with the requirement. 

Reason Behind the Move 

The extension follows feedback from industry participants who pointed to delays in setting up systems and processes.  

Trustees indicated that the segregation involves structural and operational adjustments that could not be completed within the earlier timeline. 

Rules Introduced in 2025 

In October 2025, SEBI amended the Debenture Trustee regulations. The changes required registered trustees to move activities outside SEBI’s regulatory scope into separate business units within 6 months. This marked a shift in how such entities manage different lines of work. 

Framework and Conditions 

A detailed framework was issued after the rule changes. It states that non-regulated activities must be carried out through separate units on an arm’s length basis.  

These units must be ring-fenced from regulated operations and separated by internal barriers to avoid any conflict or overlap. 

Implementation Requirements 

Trustees are expected to set up independent processes, reporting systems, and controls for these units.  

The segregation also requires changes in organisational structure and oversight mechanisms. These factors contributed to the requests for more time. 

Read More: Adani and GMR Groups Lead as India Inc Promoters Pump $4 Billion into Own Stocks Amid Market Correction! 

Conclusion 

The revised deadline allows additional time for compliance while keeping the requirement for separation in place. Debenture trustees are expected to complete the transition by October 2026. 

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