Sebi sets up expert panel to review debenture trustee regulatory framework

The panel, chaired by former Sebi whole-time member Ananta Barua, will review the regulatory framework, net-worth requirements and measures to strengthen debenture trustees' role

The Securities and Exchange Board of India (Sebi) has constituted an expert working group to review the regulatory framework governing debenture trusteeship activities amid evolving dynamics in the Indian debt market.

 

The move comes in view of the increasing importance of debenture trustees in safeguarding the interests of debenture holders and the need to align regulations with changes in the financial sector.

 

The working group will be chaired by Ananta Barua, former whole-time member of Sebi, with Rajnish Kumar, former chairman of State Bank of India, serving as co-chairperson.

 

A debenture trustee plays a key role in monitoring compliance, protecting debenture holders' interests, and overseeing the issuer's financial obligations. These are usually financial institutions, banks, insurance firms, or body corporates registered with Sebi.

 

 

Other members of the committee include O N Ravi, former general counsel and executive vice-president at CCIL; Rahul Choudhary, managing director and chief executive officer of Axis Trustee Services; Pratapsingh Nathani, managing director and chief executive officer of Beacon Trusteeship; Ashish Pahariya, partner at DSK Legal; and Vinod Kothari, partner at Vinod Kothari & Co, among others.

 

The panel is tasked with undertaking a comprehensive review of the existing regulatory framework, examining representations from market participants, and recommending measures to strengthen the role of debenture trustees. It will also review net-worth requirements and examine related matters.

 

Sebi has also invited suggestions from stakeholders on simplification, rationalisation, removal of redundancies, and strengthening of the framework by July 15.

 

"Since the introduction of the Sebi (Debenture Trustees) Regulations, 1993, the financial sector has undergone significant transformation, including the introduction of the Insolvency and Bankruptcy Code, 2016, and the growing participation of investors in the corporate bond market," the regulator noted.