(1) A Debenture Trustee which-
(a) fails to comply with any conditions subject to which certificate has been granted;
(b) contravenes any of the provisions of the Act or these regulations;
(c) contravenes the provisions of the Companies Act or the rules made there under;
(d) fails to furnish any information relating to its activity as a Debenture Trustee as required by the Board;
(e) furnishes to the Board information which is false or misleading in any material particular;
(f) does not submit periodic returns or reports as required by the Board;
(g) does not co-operate in any enquiry, inspection or investigation conducted by the Board;
(h) fails to resolve the complaints of investors or fails to give a satisfactory reply to the Board in this behalf;
shall be dealt with in the manner provided under the Securities and Exchange Board of India (Intermediaries) Regulations, 2008.
(2) Nothing contained in sub-regulation (1) shall prejudice the powers of the Board to issue directions or measures under sections 11, 11B, 11D, sub-section (3) of section 12 or section 24 or Chapter VIA of the Act or under any other law for the time being in force.]]
26. to 32. 74[***] 72 Substituted by the SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002, w.e.f. 27-9-2002.
73 Substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2017, w.e.f., 13-7-2017. Prior to the same, regulation 25 read as follows:
“25. A debenture trustee who—
(a) fails to comply with any conditions subject to which certificate has been granted;
(b) contravenes any of the provisions of the Act, rules or regulations;
(c) contravenes the provisions of the Companies Act or the rules made thereunder, shall be dealt with in the manner provided under Chapter V of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008.” 74 Regulations 26 to 32 were omitted by the SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002, w.e.f. 27-9-2002. Earlier regulation 32 was amended by SEBI (Appeal to Schedule I Forms 75[FORM A Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993 [76[Regulation 3]] 77[Application for Grant of Certificate of Registration as Debenture Trustee] Name of Applicant and its status ....................................................................................
(For status see regulation 7) Name and Designation of Principal Officer …………………………………….
Designation....................................................................
Telephone No. ..............................................................
E- mail................................................................................
Instructions:—
1. Applicants must submit a completed application form together with supporting documents to the Securities and Exchange Board of India.
3. Information which needs to be supplied in more detail may be written on separate sheets which should be attached to the application form.
2. All columns of the application should be filled in.
In case a column is not relevant then “not applicable” should be specified.
4. Original copy of form duly signed should be submitted for registration.
PART I General Information
1. Applicant’s details
1.1 Name of the applicant:
1.2 Address of the applicant:
Pin code: Telephone No.:
Securities Appellate Tribunal)(Amendment) Regulations, 2000, w.e.f. 28-3-2000. Prior to its omission, regulation 32 read as under :
“32. Any person aggrieved by an order of the Board made, on and after the commencement of the Securities Laws (Second Amendment) Act, 1999, (i.e., after 16th December 1999), under these regulations may prefer an appeal to Securities Appellate Tribunal having jurisdiction in the matter.” 75 Substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2000, w.e.f 17-2-2000.
76 Substituted for the words “Regulation 3/Regulation 8A” by the Securities and Exchange Board of India (Change In Conditions Of Registration Of Certain Intermediaries) (Amendment) Regulations, 2016 w.e.f. 08-12-
2016. Prior to this the words “Regulation 3/Regulation 8A” were substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011 for the word and figure "Regulation 3".
77 Substituted for the words “Application for Grant of Certificate of Initial/ Permanent Registration as Debenture Trustee” by the Securities and Exchange Board of India (Change In Conditions Of Registration Of Certain Intermediaries) (Amendment) Regulations, 2016 w.e.f. 08-12-2016. Prior to this the words “Application for Grant of Certificate of Initial/ Permanent Registration as Debenture Trustee” were substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011 for the words "Application for Registration as Debenture Trustee".
Telex No.: Fax No.:
E-mail:
1.3 Address of the applicant for correspondence:
Pin code: Telephone No.:
Telex No: Fax No.:
E-mail:
Name of the Compliance Officer:
Designation: Telephone:
1.4 Address of branch offices (in India) of the applicant, if any:
1.5 Whether any other application under the Securities and Exchange Board of India Act, 1992, has been made for grant of certificate, if so, details thereof:
1.5(a) Whether the applicant or its Director/s or partner/s is a partner or proprietor or promoter/s or director/s in any of its associate/group company/concern or any company/concern which is also registered with SEBI under any of its Regulations, and if so, details thereof:
Name of the company/ concern Category registered SEBI Regn. No.
Any warning given/penal action taken/investigation/enquiry initiated/pending
1.6 In case the applicant is a Bank or an NBFC, any warning/action taken by RBI.
2. Organisation structure:
2.1 Objects of the organisation of the applicant.
(Attach extracts from relevant documents like, charter/memorandum of association/articles of association, etc.) in support of objects of the organisation.
2.2 Date and place of incorporation/establishment of the organisation of the applicant.
Day Month Year Place
2.3 Organisation chart stating the functional responsibilities at various levels.
2.4 Particulars of all directors.
[Name, qualification, experience, date of appointment, other directorship, (Name & date of appointment), previous positions held.]
2.5 Number of employees (mention separately the employees in the debenture trusteeship activity).
2.6 Name and activities of associate companies/concerns.
Name/Address/Phone Nos./Type of activity/Ownership details/Nature and quantum of financial trading.
2.7 List of major shareholders (holding 5% or more voting rights) and percentage of their shareholdings.
3. Details of infrastructural facilities:
3.1 Office space (mention the extent of area and ownership details available).
3.2 Office equipment (mention the details of electronic office equipment, typewriters, telecommunication equipment, furniture and fixtures, other communication facilities, etc.)
(For point Nos. 3.1 and 3.2, please mention the infrastructure for debenture trustee activity separately)
4. Business plan (for three years)
(a) History, major achievements and present activity
5. Financial information:
5.1 Capital structure Year prior to the Preceding year of current year preceding year Current year (Rs. in lakhs)
(a) Paid-up capital
(b) Free reserves (excluding revaluation reserves)
(c) Total (a) + (b)
(d) Loans (details)
(e) Net profit:
(i)General
(ii)Specific
5.2 Deployment of resources
(a) Fixed assets
(b) Plant and machinery and office equipment
(c) Investments (Details should be given separately)
(d) Others
6. Other information:
6.1 Name and address of the principal bankers
6.2 Name and Address of the auditors (internal, external and tax auditor, if any, as applicable).
6.3 Indicate involvement in any offence relating to economic offences (including those concerned with the securities market) in the last three years, if any.
6.4 Any significant awards or recognition, collective grievances against the services rendered by the applicant.
6.5 Any other information considered relevant to the nature of services rendered by the applicant.
PART II
7. Business information
7.1 Describe proposed activity.
7.2 Details of key legal personnel:
a. Name of the person b. Responsibility c. Experience
7.3 Existing/proposed facilities for redressal of investor grievances.
(Furnish number and type of complaints received, follow-up with the companies, average time taken in resolving the complaints and overall system of handling complaints).
7.4 Details of any personnel experience in the activity of debenture trusteeship.
8. Experience
8.1 Experience as debenture trustee (Name of the body corporate, on whose behalf the applicant has acted as debenture trustee, particulars of debenture issue, size of debenture issue, when trust deed is signed, remuneration/fee received.)
8.2 Details where applicant has resigned as debenture trustee or have discharged therefrom, give full details and reasons therefor.
8.3 In case of resignation or discharge as the case may be whether the applicant has vacated the office before the appointment of successor. If so, give reasons and full details.
8.4 Whether the applicant has ensured that security has been created in the stipulated time in respect of debentures it acted as debenture trustee.
8.5 Whether the applicant has taken steps like appointment of nominee directors in case of the debenture issue of any company.
Declaration This declaration must be signed by principal officer/s I/We hereby apply for grant of certificate of registration by the Board. I/We warrant that I/we will carry out my/our duties in accordance with the Act, Rules and Regulations.
I/We state that I/we have truthfully and fully answered the questions above and provided all the information which might reasonably be considered relevant for the purposes of my/our grant of certificate for registration and I/we will promptly notify the Board of any changes in the information during the period that my/our registration is being considered and if my/our registration is accepted, thereafter.
I/We understand that misleading or attempting to mislead the Board shall render the applicant liable to disciplinary proceedings.
I/We certify that the above information and information supplied in the application form is true, complete and correct.
“We hereby declare and undertake that—
(a) the applicant-company, its directors or Principal Officers is/or has not at any time been convicted for any offence involving moral turpitude or been found guilty of any economic offence (including those concerned with the securities market),
(b) no person directly or indirectly connected with the applicant has applied or been granted registration by the Securities and Exchange Board of India to act as Debenture Trustee.” For and on behalf of ....................................... ........................................
Name of applicant Name of applicant Place: Place:
Date: Date:
78 [***] 78 The following was omitted by the Securities and Exchange Board of India (Change In Conditions Of Registration Of Certain Intermediaries) (Amendment) Regulations, 2016 w.e.f. 08-12-2016.
“Additional information sheet: (in case of application for 78 [permanent] registration)
1. Whether the applicant has complied with the terms and conditions mentioned in the registration letter?
2. Whether the applicant has complied with the SEBI (Debenture Trustees) Rules and Regulations and the guidelines issued by SEBI from time to time.
3. Whether any associate/group company of the applicant is also registered with SEBI under any Regulations, and if so the following details are to be furnished:
Name of the company/ concern SEBI Regn No. Any warning given/penal action taken/investigation/enquiry initiated/pending 4-5. Whether any investigation/enquiry has been initiated/is pending against the applicant.
6. Whether the applicant has submitted all the quarterly reports.
7. Any warning given/penal action taken against the applicant.
8. Whether the applicant has paid the fees due to SEBI in the last 3 years. Give details of payment.
9. Details of public/rights issue for which the applicant acted as trustees in the last 3 years.
10. In case of any defaults, specifically state the action the applicant has taken to protect the interest of the debenture holders and whether penal interest has been paid to the debenture holders.
(a) List of debenture issues for which the applicant was acting as debenture trustees under earlier registration where defaults by the issuers in terms of delays/non-payment of interest/principal have occurred.
Company Details of issue Details of defaults
11. Whether the applicant has obtained auditors certificate for end-use of funds for all public/rights issues.
FORM B Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993 [79[Regulation 8]] 80[Certificate of Registration] I. In exercise of the powers conferred by sub-section (1) of section 12 of the Securities and Exchange Board of India Act, 1992, read with the Rules and Regulations made thereunder for the debenture trustee, the Board hereby grants a certificate of registration to......as a debenture trustee, subject to the conditions in the Rules and in accordance with the Regulations.
II. Registration Code for the debenture trustee is........
81[III. This certificate of registration shall be valid unless it is suspended or cancelled by the Board.]
Place By Order Date For and on behalf of Securities and Exchange Board of India.
Authorised Signatory.
SCHEDULE II Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993 [Regulation 12]
12. Investor grievances relating to the debentures of companies for which the applicant acted as debenture trustees.” Also, the word “permanent” was substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011 for the words "renewal of".
79 The words “/Regulation 8 A” was omitted by the Securities and Exchange Board of India (Change In Conditions Of Registration Of Certain Intermediaries) (Amendment) Regulations, 2016 w.e.f. 08-12-2016. Prior to this the words “/Regulation 8 A” was substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011 for the word and figure "Regulation 8" 80 Substituted for the words “Certificate of Initial / Permanent Registration” by the Securities and Exchange Board of India (Change In Conditions Of Registration Of Certain Intermediaries) (Amendment) Regulations, 2016 w.e.f. 08-12-2016.
Prior to this the words “” were substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011 for the words "Certificate of Registration".
81 Substituted by the Securities and Exchange Board of India (Change In Conditions Of Registration Of Certain Intermediaries) (Amendment) Regulations, 2016 w.e.f. 08-12-2016. Prior to substitution paragraph III read as under:
“III. This certificate of registration shall be valid from ….. to …. / for permanent, unless suspended or cancelled by the Board.” Prior to this paragraph III was substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011 for the words and symbols "Unless renewed, the certificate of registration is valid from....to...."
FEES 82[1. Every debenture trustee shall pay fees of 83[twenty lakh] rupees at the time of grant of certificate of 84[***] registration.
1.A 85[***]
2. 86[A debenture trustee who has been granted a certificate of registration, to keep its registration in force, shall pay fee of nine lakh rupees every three years from the sixth year, from the date of grant of certificate of registration or from the date of grant of certificate of initial registration granted prior to the commencement of the Securities and Exchange Board of India (Change in Conditions of Registration of Certain Intermediaries) (Amendment) Regulations, 2016, as the case may be.]
3. (a) The fee referred to in paragraph 1 shall be paid by the debenture trustees within fifteen days from the date of receipt of intimation from the Board under regulation 8.
(aa) 87[***] 88[(b) The fee referred to in paragraph 2 shall be paid by the Debenture Trustee three months before expiry of the block for which fee has been paid.]
82 Substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011.Prior to substitution it read as under:
"1. Every debenture trustee shall pay a sum of ten lakh rupees as registration fees at the time of the grant of certificate by the Board.
2. Every debenture trustee to keep registration in force shall pay renewal fee of five lakh rupees every three years from the fourth year from the date of initial registration."
83 Substituted by the SEBI (Payment of Fees) (Amendment) Regulations, 2014, w.e.f.23-5-2014 for the words "thirteen lakh thirty three thousand and three hundred".
84 The word “initial” was omitted by the Securities and Exchange Board of India (Change In Conditions Of Registration Of Certain Intermediaries) (Amendment) Regulations, 2016 w.e.f. 08-12-2016.
85 Omitted by the Securities and Exchange Board of India (Change In Conditions Of Registration Of Certain Intermediaries) (Amendment) Regulations, 2016 w.e.f. 08-12-2016. Prior to omission paragraph 1A read as under:
“1A. A debenture trustee referred to under sub-regulation (3) of regulation 8, shall pay fees for the remaining period of two years on pro rata basis to the fee prescribed under paragraph 2.” 86 Substituted by the Securities and Exchange Board of India (Change In Conditions Of Registration Of Certain Intermediaries) (Amendment) Regulations, 2016 w.e.f. 08-12-2016. Prior to substitution paragraph 2 read as under:
“2. A debenture trustee who has been granted a certificate of permanent registration, to keep its registration in force, shall pay fees of 86 [nine] lakh rupees every three years from the sixth year from the date of grant of certificate of initial registration, or from completion of the period of renewed certificate of registration, as the case may be.” 87 Omitted by the Securities and Exchange Board of India (Change In Conditions Of Registration Of Certain Intermediaries) (Amendment) Regulations, 2016 w.e.f. 08-12-2016. Prior to omission paragraph 3(aa) read as under:
“(aa) The fees referred to in paragraph 1A shall be paid by the debenture trustee within a period of three months before completion of the period of three years from the date of grant of certificate of initial registration, or within a period of three months from the date of notification of these regulations, as the case may be.” Prior to the above, paragraph 3 (aa) was inserted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011.
88 Substituted by the Securities and Exchange Board of India (Change In Conditions Of Registration Of Certain Intermediaries) (Amendment) Regulations, 2016 w.e.f. 08-12-2016. Prior to substitution paragraph 3(b) as substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011 read as under:
89[3A. The non-refundable fee payable along with an application for registration under sub-regulation (1A) of regulation 3 shall be a sum of fifty thousand rupees.]
4. The fees specified in paragraphs 90[1, 91[***] 2 and 3A] shall be payable by the Debenture Trustees 92[by way of direct credit in the bank account through NEFT/RTGS/IMPS or any other mode allowed by RBI or] by a demand draft in favour of “The Securities and Exchange Board of India” payable at Mumbai or at the respective regional office.]
93[SCHEDULE III Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993 [Regulation 16] CODE OF CONDUCT
1. A Debenture Trustee shall make all efforts to protect the interest of debenture holders.
2. A Debenture Trustee shall maintain high standards of integrity, dignity and fairness in the conduct of its business.
3. A Debenture Trustee shall fulfill its obligations in a prompt, ethical and professional manner.
“(b) The fee referred to in paragraph 2 shall be paid by the debenture trustee, at the time of grant of permanent registration, within fifteen days from the date of receipt of intimation from the Board under sub-regulation (6) of regulation 8A and thereafter the fee shall be paid three months before expiry of the block for which fee has been paid.” Prior to the above, paragraph 3(b) was substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011.Prior to substitution it read as under:
"(b) The fee referred to in paragraph 2 shall be paid by the debenture trustee within fifteen days of receipt of intimation from the Board disposing of the application for renewal made under sub-regulation (1) of regulation
9."
89 Substituted by the Securities and Exchange Board of India (Change In Conditions Of Registration Of Certain Intermediaries) (Amendment) Regulations, 2016 w.e.f. 08-12-2016. Prior to substitution paragraph 3A read as under:
“3A. The non-refundable fee payable along with an application for registration under sub-regulation (1A) of regulation 3 or an application for 89 [permanent registration under sub-regulation (1) or sub-regulation (2) of regulation 8A] shall be a sum of 89 [fifty] thousand rupees.” Prior to the above paragraph 3A was inserted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2006, w.e.f. 7-9-2006.
Also, the words “permanent registration under sub-regulation (1) or sub-regulation (2) of regulation 8A” were substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011 for the words and figures "renewal of registration under sub-regulation (1A) of regulation 9"; and the words “fifty” were substituted by the SEBI (Payment of Fees) (Amendment) Regulations, 2014, w.e.f. 23-5-2014 for the words "twenty five" 90 Substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011 for the letters and figures "1, 2 and 3A" which was earlier substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2006, w.e.f. 7-9-2006.
91 The words “1A” omitted by the Securities and Exchange Board of India (Change In Conditions Of Registration Of Certain Intermediaries) (Amendment) Regulations, 2016 w.e.f. 08-12-2016.
92 Inserted by the SEBI (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017, w.e.f.
6-3-2017.
93 Substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2003, w.e.f 1-10-2003. Earlier, it was amended by the SEBI (Investment Advice by Intermediaries) (Amendment) Regulations, 2001, w.e.f. 29-5-
2001.
4. A Debenture Trustee shall at all times exercise due diligence, ensure proper care and exercise independent professional judgment.
5. A Debenture Trustee shall take all reasonable steps to establish the true and full identity of each of its clients, and of each client’s financial situation and maintain record of the same.
6. A Debenture Trustee shall ensure that any change in registration status/any penal action taken by Board or any material change in financial position which may adversely affect the interests of clients/debenture holders is promptly informed to the clients and any business remaining outstanding is transferred to another registered intermediary in accordance with any instructions of the affected clients.
7. A Debenture Trustee shall avoid conflict of interest and make adequate disclosure of its interest.
8. A Debenture Trustee shall not divulge to anybody either orally or in writing, directly or indirectly, any confidential information about its clients which has come to its knowledge, without taking prior permission of its clients, except where such disclosures are required to be made in compliance with any law for the time being in force.
9. A Debenture Trustee shall put in place a mechanism to resolve any conflict of interest situation that may arise in the conduct of its business or where any conflict of interest arises, shall take reasonable steps to resolve the same in an equitable manner.
10. A Debenture Trustee shall make appropriate disclosure to the client of its possible source or potential areas of conflict of duties and interest while acting as debenture trustee which would impair its ability to render fair, objective and unbiased services.
11. A Debenture Trustee shall not indulge in any unfair competition, which is likely to harm the interests of other trustees or debenture holders or is likely to place such other debenture trustees in a disadvantageous position while competing for or executing any assignment nor shall it wean away the clients of another trustee on assurance of lower fees.
12. A Debenture Trustee shall not discriminate among its clients, except and save on ethical and commercial considerations.
13. A Debenture Trustee shall share information available with it regarding client companies, with registered credit rating agencies.
14. A Debenture Trustee shall provide clients and debenture holders with adequate and appropriate information about its business, including contact details, services available to clients, and the identity and status of employees and others acting on its behalf with whom the client may have to contact.
15. A Debenture Trustee shall ensure that adequate disclosures are made to the debenture holders, in a comprehensible and timely manner so as to enable them to make a balanced and informed decision.
16. A Debenture Trustee shall endeavour to ensure that—
(a) inquiries from debenture holders are adequately dealt with;
(b) grievances of debenture holders are redressed in a timely and appropriate manner;
(c) where a complaint is not remedied promptly, the debenture holder is advised of any further steps which may be available to the debenture holder under the regulatory system.
17. A Debenture Trustee shall make reasonable efforts to avoid misrepresentation and ensure that the information provided to the debenture holders is not misleading.
18. A Debenture Trustee shall maintain required level of knowledge and competency and abide by the provisions of the Act, regulations and circulars and guidelines. The debenture trustee shall also comply with the award of the Ombudsman passed under the Securities and Exchange Board of India (Ombudsman) Regulations, 2003.
19. A Debenture Trustee shall not make untrue statement or suppress any material fact in any documents, reports, papers or information furnished to the Board.
20. A Debenture Trustee or any of its directors, partners or manager having the management of the whole or substantially the whole of affairs of the business, shall not either through its account or their respective accounts or through their associates or family members, relatives or friends indulge in any insider trading.
21. A Debenture Trustee shall ensure that the Board is promptly informed about any action, legal proceeding, etc., initiated against it in respect of any material breach or non-compliance by it, of any law, rules, regulations, directions of the Board or of any other regulatory body.
22. (a) A Debenture Trustee or any of his employees shall not render, directly or indirectly, any investment advice about any security in the publicly accessible media, whether real-time or non-real-time unless a disclosure of his interest including long or short position in the said security has been made, while rendering such advice.
(b) In case, an employee of the Debenture Trustee is rendering such advice, the debenture trustee shall ensure that he discloses his interest, the interest of his dependent family members and that of the employer, including their long or short position in the said security, while rendering such advice.
23. A Debenture Trustee shall ensure that any person it employs or appoints to conduct business is fit and proper and otherwise qualified to act in the capacity so employed or appointed (including having relevant professional training or experience).
24. A Debenture Trustee shall ensure that it has adequate resources to supervise diligently and does supervise diligently persons employed or appointed by it to conduct business on its behalf.
25. A Debenture Trustee shall have internal control procedures and financial and operational capabilities which can be reasonably expected to protect its operations, its clients, debenture holders and other registered entities from financial loss arising from theft, fraud, and other dishonest acts, professional misconduct or omissions.
26. A Debenture Trustee shall be responsible for the acts or omissions of its employees and agents in respect to the conduct of its business.
27. A Debenture Trustee shall provide adequate freedom and powers to its compliance officer for the effective discharge of its duties.
28. A Debenture Trustee shall ensure that the senior management, particularly decision makers have access to all relevant information about the business on a timely basis.
29. A Debenture Trustee shall ensure that good corporate policies and corporate governance is in place.
30. A Debenture Trustee shall develop its own internal code of conduct for governing its internal operations and laying down its standards of appropriate conduct for its employees and officers in the carrying out of their duties. Such a code may extend to the maintenance of professional excellence and standards, integrity, confidentiality, objectivity, avoidance of conflict of interests, disclosure of shareholdings and interests, etc.
31. A Debenture Trustee shall not be party to—
(i) creation of false market;
(ii) price rigging or manipulation;
(iii) passing of unpublished price sensitive information in respect of securities which are listed and proposed to be listed in any stock exchange to any person or intermediary.]
94[95[Schedule IV] 94 Schedule IV omitted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2017, w.e.f., 13-7-2017.
Prior to its omission, the Schedule read as follows:
Schedule IV Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993 [Regulation 14] CONTENTS OF TRUST DEED Every debenture trustee shall ensure that the trust deed executed between a body corporate and debenture trustee shall amongst other things provide for the following matters namely: — Preamble
1. This section shall inter alia state the rights of the debenture holders and the manner in which these rights are vested in the trustee.
Description of instruments
2. This section shall inter alia state the purpose of raising finance through debenture issue, description of debentures as regards amount, tenure, interest/coupon rate, periodicity of payment, period for redemption, options available, terms of conversion/redemption of the debentures in terms of the issue to the debenture holders, debt equity ratio and debt service coverage ratio, if applicable.
Details of Charged Securities (Existing or future)
3. This section shall inter alia state the details regarding the following:
i. Nature of charge, examination of title.
ii. Rank of charge of assets viz. first, second, pari passu, residual etc.
iii. Charging of future assets.
iv. Time limit within which the future security for the issue of debentures shall be created as specified in SEBI (Disclosure and Investor Protection) Guidelines, 2000.
v. Enforceability of securities, events under which security becomes enforceable.
vi. Obligation of company not to create further charge or encumbrance of the trust property without prior approval of the trustee.
vii. Minimum security cover required.
viii. Provision for subsequent valuation.
ix. Circumstances when the security will become enforceable.
x. Method and mode of preservation of assets charged as security for debenture holders.
xi. Circumstances specifying when the security may be disposed of or leased out with the approval of trustees.
xii. Procedure for allowing inspection of charged assets, books of account, by debenture trustee or any person or persons authorised by it.
Events of defaults
4. This section shall clearly define the event of default which if occurs shall invite the actions by debenture trustee. This section shall also contain the steps which shall be taken by debenture trustee in the event of defaults.
Rights of debenture trustees
5. This section shall inter alia provide that:
i. Debenture trustee is entitled to inspect the registers of the company and to take copies and extracts thereof;
ii. Debenture trustee has a right to appoint a nominee director.
Obligations of body corporates
6. This section shall inter alia state the following with respect to company’s duties:
1. to maintain Register of debenture holders with addresses with record of subsequent transfers and changes of ownership.
2. to keep proper books of account open for inspection by debenture trustee.
3. to furnish whatever required information to debenture trustee including copies of reports, balance sheets, profit and loss accounts etc.
4. to keep charged property/security adequately insured and in proper condition.
5. to permit debenture trustee to enter and inspect the state and condition of charged assets.
6. to pay all taxes, cesses, insurance premia with respect to charged property/security, on time.
7. to inform debenture trustee before declaring or distributing dividend.
8. to comply with all guidelines/directions issued by any Regulatory authority, with respect to the instant debenture issue.
9. to create debenture redemption reserve as per the SEBI (Disclosure and Investor Protection) Guidelines, 2000 and the provisions of Companies Act and submit an auditor’s certificate to the trustee.
10. to convert the debentures into equity in accordance with the terms of the issue, if applicable.
11. to inform debenture trustee about any change in nature and conduct of business by company before such change.
12. to keep the debenture trustee informed of all orders, directions, notices, of court/Tribunal affecting or likely to affect the charged assets.
13. to inform debenture trustee of any major change in composition of its Board of Directors, which may amount to change in control as defined in SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.
14. to submit any such information, as required by the debenture trustee.
15. fee or commission of debenture trustees.
16. obligation to inform debenture trustee about any change in nature and conduct of business by the body corporate before such change.
17. obligation of the body corporate to forward a quarterly report to debenture trustees containing the following particulars:
(i) updated list of the names and addresses of the debenture holders;
(ii) details of interest due but unpaid and reasons thereof;
(iii) the number and nature of grievances received from debenture holders and resolved by the body corporate;
(iv) a statement that the assets of the body corporate which are available by way of security are sufficient to discharge the claims of the debenture holders as and when they become due.
7. Miscellaneous a. Procedure for appointment and removal of trustee including appointment of new trustees.
b. Provision that the debenture trustee shall not relinquish from its assignment unless another debenture trustee has been appointed.
c. Procedure to remove debenture trustee by debenture holders providing for removal on a resolution passed by at least 75% of the total debenture holders of a body corporate.
d. Provisions for redressal of grievances of debenture holders.
Note: The debenture trustee may incorporate additional clauses, provided that the additional clauses do not dilute or contravene the provisions of the above clauses.” 95 Substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2003, w.e.f 4-7-2003. Earlier, it was amended by the SEBI (Debenture Trustees) (Second Amendment) Regulations, 2000, w.e.f. 8-8-2000.