SEBI issues a fresh Master Circular for Debenture Trustees on 28 September 2026; the August 2025 Master Circular is rescinded
SEBI has issued a new Master Circular for Debenture Trustees dated 28 September 2026, compiling the circulars in force on that date in 17 chapters. The Master Circular of 13 August 2025 stands rescinded, with actions taken under it saved. Annexure 1 lists five superseded circulars, including those on issuer reporting timelines, the Recovery Expenses Fund and activities outside SEBI’s purview.
Key facts
- In force
- 28 September 2026
- Who it affects
- Registered debenture trustees, issuers of listed debt securities and municipal debt securities, credit rating agencies, stock exchanges, depositories
- What it is
- New facility
- Section
- SEBI
- Published
- 28 September 2026
In 30 seconds
- Master Circular No. HO/17/11/12(2)2026-DDHS-POD1/I/22420/2026 is dated 28 September 2026 and runs to 126 pages.
- It is a compilation of the existing circulars issued as on 28 September 2026.
- The Master Circular dated 13 August 2025 is rescinded; things done and applications pending under it are deemed to be under the new one.
- Issuers must give the security cover certificate to the debenture trustee within 60 days of each quarter-end (75 days for the last quarter).
- Recovery Expenses Fund: 0.01% of the issue size, subject to a maximum of ₹25 lakh per issuer.
- Debenture trustees must implement the conditions for non-SEBI regulated activities by 27 October 2026.
हिंदी में सार
SEBI ने 28 सितंबर 2026 को Debenture Trustees के लिए नया Master Circular जारी किया है; 13 अगस्त 2025 का Master Circular रद्द हो गया है, पर उसके तहत की गई कार्रवाई और लंबित आवेदन सुरक्षित हैं। 17 अध्यायों में due diligence, security cover certificate, Recovery Expenses Fund (इश्यू का 0.01%, अधिकतम ₹25 लाख) और निगरानी के नियम एक जगह हैं। गैर-SEBI गतिविधियाँ अलग Business Unit से चलाने की शर्तें 27 अक्टूबर 2026 तक लागू करनी हैं।
Before and now
Master Circular for Debenture Trustees dated 13 August 2025, read with four later circulars.
Master Circular dated 28 September 2026; the earlier one stands rescinded.
Why a new Master Circular
SEBI issued a Master Circular for Debenture Trustees on 13 August 2025 so that debenture trustees and other market participants could find all applicable circulars in one place. Since then, the covering letter says, substantial modifications have been made to it, which calls for a separate Master Circular. The new one is dated 28 September 2026 and compiles the existing circulars issued as on that date, chapter-wise.
It is addressed to registered debenture trustees, the Trustees Association of India, the United Trustee Association of India, credit rating agencies, issuers who have listed or propose to list debt securities and municipal debt securities, stock exchanges and depositories.
What happens to the old one
The Master Circular dated 13 August 2025 stands rescinded. Despite that:
- anything done or any action taken under it is deemed to have been done under the corresponding provisions of the new Master Circular;
- any application made to SEBI under it and still pending is deemed to have been made under the new one;
- rights, obligations, liabilities and penalties already incurred, and any investigation or legal proceeding about them, are not affected.
Circulars superseded (Annexure 1)
| Date | Circular |
|---|---|
| 13 August 2025 | Master Circular for Debenture Trustees |
| 25 November 2025 | Timeline for submission of information by the issuer to the debenture trustee(s) |
| 25 November 2025 | Modifications to Chapter IV of the Master Circular (Recovery Expenses Fund) |
| 25 November 2025 | Terms and conditions for debenture trustees carrying out activities outside the purview of SEBI |
| 28 April 2026 | Extension of timeline for compliance with those terms and conditions |
What the 17 chapters cover
Terms of registration; due diligence; the security and covenant monitoring system; Recovery Expenses Fund; security cover certificate; periodical monitoring; website disclosures; the debenture trust deed and sharing of information with credit rating agencies; investor grievances; breach of covenants, default and remedies; transactions in defaulted debt securities after maturity; the centralised database; reporting of regulatory compliance; outsourcing; unauthenticated news; conflicts of interest; and registration with FINNET 2.0 of FIU-India.
Points issuers and trustees will look up most
| Item | Position in the Master Circular |
|---|---|
| Issuer to debenture trustee: security cover certificate, statement of value of pledged securities, statement of value for the Debt Service Reserve Account | Quarterly, within 60 days of the end of each quarter; 75 days for the last quarter |
| Debenture trustee to stock exchange: the same reports | Quarterly, within 75 days; 90 days for the last quarter |
| Financial covenants | Issuer furnishes compliance status quarterly, certified by its statutory auditor |
| Recovery Expenses Fund | Issuer deposits 0.01% of the issue size, maximum ₹25 lakh per issuer, with the Designated Stock Exchange at the time of the listing application; cash, cash equivalents or bank guarantee |
| Use of the Fund on default | No prior approval of debenture holders for the enforcement and legal expenses listed; the exchange releases the amount within five working days of intimation |
| Activities not regulated by SEBI | Only at arm’s length through a Separate Business Unit, ring-fenced by a Chinese Wall, with separate records, grievance redress and website disclosure; to be implemented by 27 October 2026 |
What to do
Debenture trustees, issuers of listed debt and rating agencies should cite the 28 September 2026 Master Circular from now on. Trustees that carry on non-SEBI regulated activities should check their Separate Business Unit arrangements against the 27 October 2026 date.
Questions and answers
Which Master Circular for Debenture Trustees is current?
The Master Circular dated 28 September 2026. With its issue, the Master Circular dated 13 August 2025 stands rescinded.
Are actions taken under the 2025 Master Circular still valid?
Yes. Anything done or any action taken under the rescinded Master Circular is deemed to have been done under the corresponding provisions of the new one, and pending applications are treated as made under it. Rights, liabilities and penalties already incurred are not affected.
How much is the Recovery Expenses Fund?
An issuer proposing to list debt securities deposits 0.01% of the issue size, subject to a maximum of ₹25 lakh per issuer, with the Designated Stock Exchange identified in its offer document.
By when must an issuer give the security cover certificate to the debenture trustee?
On a quarterly basis within 60 days from the end of each quarter, except the last quarter, when it is to be given within 75 days.
Can a debenture trustee carry on business that SEBI does not regulate?
Yes, but only on an arm’s length basis through one or more Separate Business Units, segregated by a Chinese Wall and ring-fenced from SEBI regulated activities, with the disclosures set out in the Master Circular. These provisions are to be implemented by 27 October 2026.
Published 28 September 2026. Updated 6 October 2026. This report is for general information and is not professional advice. Read the source document before acting on it.