The Securities and Exchange Board of India (SEBI) on August 04, 2022 vide Circular No. SEBI/HO/DDHS/DDHS_Div1/P/CIR/2022/106 issued ‘ Enhanced guidelines for debenture trustees and listed issuer companies on security creation and initial due diligence’.
SEBI approved changes to the regulatory framework relating to debenture trustees (DTs), enhancing their role. Resultant amendments were made in the SEBI (Debenture Trustees) Regulations, 1993, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and erstwhile SEBI (Issue and Listing of Debt Securities) Regulations, 2008 , pursuant to which a circular2 on the creation of security and due diligence by DTs was issued.
Since the issue of the circular, SEBI has received feedback from market participants on the aspects of due diligence and security creation. On the basis of such feedback, it has been decided that certain aspects of the said circular be tweaked. Accordingly, the present circular lays down revised requirements relating to encumbrance, creation of security and related due diligence by DTs.