(1) The Board may require the applicant to furnish further information or clarification regarding matters which are relevant to a debenture trustee to consider the application for a grant of a certificate.
(2) The applicant or, its principal officer shall, if so required, appear before the Board for personal representation.
17 Inserted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2006, w.e.f. 7-9-2006.
18 Inserted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2017, w.e.f., 13-7-2017.
19 Words “and the rules” omitted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2006, w.e.f. 7- 9-2006, respectively.
20 Words “or the Rules, as the case may be” omitted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2006, w.e.f. 7-9-2006, respectively.
21 Inserted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2003, w.e.f. 4-7-2003.
22 Inserted by SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011.
23 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.
24 Inserted by SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011.
25 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.
26 Inserted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2006, w.e.f. 7-9-2006.
Application to conform to the requirements.
5. Subject to the provisions of sub-regulation (2) of regulation 3, any application, which is not complete in all respects and does not conform to the instructions specified in the form, shall be rejected:
Provided that, before rejecting any such application, the applicant shall be given an opportunity to remove within the time specified such objections as may be indicated by the Board.
Consideration of application.
6. The Board shall take into account for considering the grant of a certificate, all matters which are relevant to a debenture trustee and in particular the following, namely, whether the applicant,—
(a) has the necessary infrastructure like adequate office space, equipments, and manpower to effectively discharge his activities;
(b) has any past experience as a debenture trustee or has in his employment minimum two persons who had the experience in matters which are relevant to a debenture trustee;
(c) or any person, directly or indirectly connected with the applicant has not been granted registration by the Board under the Act;
27[(d) has in his employment at least one person who possesses the professional qualification in law from an institution recognised by the Government;]
(e)or any of its director or principal officer is or has at any time been convicted for any offence involving moral turpitude or has been found guilty of any economic offence ;
28[(f) is a fit and proper person;]
29 [(g) fulfills the capital adequacy requirements specified in regulation 7A.]
30[ Criteria for fit and proper person
6A. For the purpose of determining whether an applicant or the debenture trustee is a fit and proper person the Board may take into account the criteria specified in Schedule II of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008.]
31[Eligibility for being debenture trustee.
27 Substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2003, w.e.f. 4-7-2003. Prior to its substitution clause (d) read as under :
“(d) has in its employment at least one person who possesses the professional qualification from an institution recognized by the Government in finance, accountancy, law or business management. ” 28 Inserted by the SEBI (Debenture Trustees) (Amendment) Regulations, 1998, w.e.f. 5-1-1998.
29 Inserted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2003, w.e.f. 4-7-2003.
30 Substituted by the Securities and Exchange Board of India (Intermediaries) Regulations, 2008, w.e.f. 26-5-
2008. Prior to its substitution regulation 6A read as under:
“Applicability of Securities and Exchange Board of India (Criteria for Fit and Proper Person) Regulations, 2004.
31 Substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2017, w.e.f., 13-7-2017. Prior to the same, regulation 7 read as follows:
“Eligibility for being debenture trustee.
7. No person shall be entitled to act as a debenture trustee unless he is either—
(a) a scheduled bank carrying on commercial activity; or
(b) a public financial institution within the meaning of section 4A of the Companies Act, 1956; or
(c) an insurance company; or
(d) body corporate.”
7. No person shall be entitled to act as a debenture trustee unless it is :—
(a) a scheduled bank carrying on commercial activity; or
(b) a public financial institution as defined sub-section (72) of section 2 of the Companies Act, 2013; or
(c) an insurance company; or
(d) body corporate as defined under sub-section (11) of section 2 of the Companies Act, 2013.]
32[Capital Adequacy Requirement.
7A. The capital adequacy requirement referred to in clause (g) of regulation 6 shall not be less than the net worth of 33[ten] crore rupees:
34[Provided that a debenture trustee holding certificate of registration as on the date of commencement of the Securities and Exchange Board of India (Debenture Trustees) (Amendment) Regulations, 2019 shall fulfil the net worth requirements within three years from the date of such commencement.]
35[***] 36[8. Grant of certificate of 37[***] registration.
(1) The Board on being satisfied that the applicant is eligible, shall send an intimation to the applicant, within one month of such satisfaction, that it has been found eligible for grant of certificate of 38[***] registration and grant a certificate in Form B.
39[(2) The certificate of registration granted under sub-regulation (1) shall be valid unless it is suspended or cancelled by the Board.]
32 Substituted by the SEBI (Debenture Trustees) (Second Amendment) Regulations, 2011, w.e.f. 14-12-2011.
Prior to substation, as inserted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2003, w.e.f. 4-7- 2003, it read as under:
"Capital Adequacy Requirement.
7A. The capital adequacy requirement referred to in clause (g) of regulation 6 shall not be less than the networth of one crore rupees:
Provided that a debenture trustee holding certificate of registration as on the date of commencement of the Securities and Exchange Board of India (Debenture Trustees) (Amendment) Regulations, 2003 shall fulfill the networth requirements within two years from the date of such commencement."
33 Substituted for the word "two" by the Securities and Exchange Board of India (Debenture Trustees) (Amendment) Regulations, 2019 w.e.f. May 07, 2019.
34 Inserted by the Securities and Exchange Board of India (Debenture Trustees) (Amendment) Regulations, 2019 w.e.f. May 07, 2019.
35 Proviso 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 omission the proviso read as under:
“Provided that a debenture trustee, who was granted a certificate of initial or permanent registration, as the case may be, under these regulations prior to the commencement of the Securities and Exchange Board of India (Debenture Trustees) (Second Amendment) Regulations, 2011, shall raise its networth to the said minimum within a period of two years from such commencement.]” 36 Substituted by SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011.Prior to substitution, it read as under:
"Procedure for registration.
8. The Board on being satisfied that the applicant is eligible, shall send an intimation to the applicant mentioning that he has been found eligible for the grant of certificate and grant a certificate in Form B, subject to the payment of fees as specified in regulation 12."
37 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.
38 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.
40[(3) The debenture trustee who has already been granted certificate of registration by the Board, prior to the commencement of the Securities and Exchange Board of India (Change in Conditions of Registration of Certain Intermediaries) (Amendment) Regulations, 2016 shall be deemed to have been granted a certificate of registration, in terms of sub-regulation (1).]
(4) The grant of a certificate of 41[***] registration shall be subject to payment of the registration fee as specified in Schedule II of these regulations.
8A. 42[***]
9. 43[***] 39 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 sub-regulation (2) read as under:
“(2) The certificate of initial registration granted under sub-regulation (1) shall be valid for a period of five years from the date of its issue to the applicant.” 40 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 sub-regulation (2) read as under:
“(3) The debenture trustee who has already been granted a certificate of registration by the Board, prior to the commencement of the Securities and Exchange Board of India (Debenture Trustees) (Amendment) Regulations, 2011, and has not completed a period of three years, shall be deemed to have been granted a certificate of initial registration for a period of five years from the date of its certificate of registration, subject to payment of fee for the remaining period of two years, as specified in Schedule II of these regulations.” 41 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.
42 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 regulation 8A read as under:
“Grant of certificate of permanent registration.
(1) The debenture trustee who has been granted or deemed to have been granted a certificate of initial registration under regulation 8, may, three months before the expiry of the period of initial registration, make an application for grant of a certificate of permanent registration in Form A.
(2) The debenture trustee who has already been granted certificate of registration by the Board and has completed a period of five years, on the date of commencement of the Securities and Exchange Board of India (Debenture Trustees) (Amendment) Regulations, 2011, may, three months before the expiry of validity of certificate of registration or before, make an application for grant of a certificate of permanent registration in Form A.
(3) An application under sub-regulation (1) or sub-regulation (2) shall be accompanied by non-refundable application fee as specified in Schedule II of these regulations.
(4) The application for grant of a certificate of permanent registration shall be accompanied by details of the changes that have taken place in the information that was submitted to the Board while seeking initial registration or renewal, as the case may be, and a declaration stating that no changes other than those as mentioned in such details have taken place.
(5) The application for permanent registration made under sub-regulation (1) or (2) shall be dealt with in the same manner as if it were a fresh application for grant of a certificate of initial registration and the Board shall take a decision within three months from the date of receipt of all information.
(6) The Board, on being satisfied that the applicant is eligible, shall grant a certificate of permanent registration in Form B and shall send an intimation to the applicant.
(7) The grant of a certificate of permanent registration shall be subject to payment of fees specified in Schedule II of these regulations.” 43 Omitted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011. Prior to its omission, it read as under:
"Renewal of certificate.
9(1) A debenture trustee may, if he so desires, make an application in Form A for renewal of certificate before three months of the expiry of the period of certificate.
44[Conditions of registration.
9A.(1) 45[Registration granted under regulation 8] shall be subject to the following conditions, namely :—
(a)where debenture trustee proposes 46[change in control], it shall obtain prior approval of the Board for continuing to act as such after the change;
47[(b) it shall pay the fees for registration, in the manner provided in these regulations;]
(c)it shall take adequate steps for redressal of grievances of the investors within one month of the date of the receipt of the complaint and keep the Board informed about the number, nature and other particulars of the complaints received and the manner in which such complaints have been redressed;
(d) it shall maintain capital adequacy requirements specified in regulation 7A at all times during the period of the 48[***];
(e)it shall abide by the regulations made under the Act in respect of the activities carried on by it as a debenture trustee.
49[(f) it shall immediately intimate the Board, details of changes that have taken place in the information that was submitted, while seeking registration.]
(2) Nothing contained in clause (a) of sub-regulation (1) shall affect the obligation to obtain a fresh registration under section 12 of the Act in cases where it is applicable.
9B. 50[***] 43[(1A) An application for renewal made under sub-regulation (1) shall be accompanied by a non-refundable application fee as specified in Schedule II.]
(2) The application for renewal of certificate under sub-regulation (1) shall be dealt with in the same manner as if it were an application for grant of a certificate made under regulation 3."
44 Inserted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2006, w.e.f. 7-9-2006.
45 Substituted for the words “Any 45 [initial registration] granted under regulation 8 or any [permanent registration granted under 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 substitution the words “initial registration” and “permanent registration granted under regulation 8A” substituted the words "registration" and "renewal granted under regulation 9" respectively by the SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011.
46 Substituted by SEBI (Change in Conditions of Registration of Certain Intermediaries) (Amendment) Regulations, 2011, w.e.f. 13-4-2011 for the words "to change its status or constitution".
47 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, clause (b) read as under:
“(b) it shall pay the fees for 47 [initial registration or permanent registration], as the case may be, in the manner provided in these regulations;” Prior to this the words “initial registration or permanent registration” were substituted for the words "registration or renewal"by the SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011 48 The words “initial or permanent registration” were 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 “initial or permanent registration” were substituted for the words "certificate or renewal thereof" by the SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011.
49 Inserted 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.
50 Omitted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011.Prior to omission, it read as under:
"9B. Time period for disposal of application and period of validity of certificate.
Procedure where registration is not granted.
10. 51[(1) Where an application for grant of a certificate of registration under regulation 3 does not fulfil the requirements set out in regulation 6, the Board shall reject the application after giving an opportunity of being heard.]
52[(2) The refusal to grant registration shall be communicated by the Board within thirty days of such refusal to the applicant stating therein the grounds on which the application has been rejected.]
(3) Any applicant may, being aggrieved by the decision of the Board under subregulation (2), apply within a period of thirty days from the date of receipt of such intimation, to the Board for, reconsideration of its decision.
(4) On receipt of the application made under sub-regulation (3), the Board shall reconsider its decision and communicate its findings thereon as soon as possible in writing to the applicant.
53[11. ***]
(1) The Board shall within three months of receipt of all information for considering the application for grant of registration made under regulation 8, or for its renewal made under regulation 9, take a decision thereon and send intimation to the applicant.
(2) The certificate of registration granted under regulation 8 and its renewal granted under regulation 9, shall be valid for a period of three years from the date of its issue."
51 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 sub-regulation (1) read as under:
“(1) Where an application for grant of a certificate 51 [of initial registration under regulation 3 or of permanent registration under regulation 8A] does not fulfil the requirements set out in regulation 6, the Board may reject the application, after giving a reasonable opportunity of being heard.” Prior to this the words “of initial registration under regulation 3 or of permanent registration under regulation 8A” were substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011 for the words "under regulation 3 or of renewal under regulation 9".
52 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 regulation 11 read as under:
“11. Effect of refusal to grant certificate of permanent registration.
The debenture trustee whose application for grant of certificate of permanent registration has been refused by the Board, on and from the date of the receipt of the communication, shall cease to carry on any activity as debenture trustee:
Provided that the Board may, in the interest of the investors of the securities market, permit to carry on activities undertaken prior to the receipt of the intimation of refusal, subject to such condition as the Board may specify.” Prior to this regulation 11 was 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 sub-regulation (2) read as under:“The 52 [refusal to grant initial or permanent registration, as the case may be] shall be communicated by the Board within thirty days of such refusal to the applicant stating therein the grounds on which the application has been rejected.” Prior to this the words “refusal to grant initial or permanent registration, as the case may be” were substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011 for the words "refusal to grant or renew the certificate".
53 Substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011. Prior to substitution, it read as:
"Effect of refusal to grant certificate or renew certificate.
11. Any debenture trustee whose application for grant or renewal of a certificate has been refused by the Board shall on and from the date of the receipt of the communication under sub-regulation (2) of regulation 10 cease to act as a debenture trustee."
Payment of fees, and the consequences of failure to pay fees.
12. 54[(1) Every applicant eligible for grant of registration, shall pay the fees in such manner and within the period specified in Schedule II:]
Provided that Board may, on sufficient cause being shown, permit the debenture trustee to pay such fees at any time before the expiry of six months from the date on which such fees become due.
(2) Where the debenture trustee fails to pay the fees as provided in sub-regulation
(1), the Board may suspend the certificate, whereupon the debenture trustee shall forthwith cease to act as a debenture trustee.
Chapter III RESPONSIBILITIES AND OBLIGATIONS OF DEBENTURE TRUSTEES Obligation before appointment as debenture trustees.
13. No debenture trustee who has been granted a certificate under regulation 8 shall act as such in respect of each issue of debenture unless— 55 [(a) he enters into a written agreement with the body corporate before the opening of the subscription list for issue of debentures;
(b) the agreement under clause (a) shall inter alia contain:
56[(i) an undertaking by the body corporate to comply with all regulations / provisions of Companies Act, 2013, guidelines of other regulatory authorities in respect of allotment of debentures till redemption;
(ii) the time limit within which the security for the debentures shall be created or the agreement shall be executed in accordance with the Companies Act, 2013 or provisions as prescribed by any regulatory authority as applicable.]] Debenture Trustee not to act for an associate.
57[13A. 58[A person shall not be appointed as a debenture trustee, in case- 54 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 sub-regulation (1) read as under:
“(1) Every applicant eligible for grant 54 [of initial or permanent registration, as the case may be] shall pay the fees in such manner and within the period specified in Schedule II:” Prior to this the words “of initial or permanent registration, as the case may be” were substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2011, w.e.f. 5-7-2011 for the words "or renewal of a certificate".
55 Substituted for the following clauses (a) and (b) the SEBI (Debenture Trustees) (Second Amendment) Regulations, 2000, w.e.f 8-8-2000 :
“(a) he gives consent in writing to a body corporate to act as debenture trustee under trust deed for securing any issue of debentures by each such body corporate ;
(b) consent under clause (a) is given before the issue of debentures for subscription.” 56 Substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2017, w.e.f., 13-7-2017. Prior to the same, clauses (i) and (ii) read as follows:
“(i) that the debenture trustee has agreed to act as such under the trust deed for securing an issue of debentures for the body corporate;
(ii) the time limit within which the security for the debentures shall be created.” 57 Substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2003, w.e.f. 4-7-2003. Earlier regulation 13A was inserted by the SEBI (Debenture Trustees) (Second Amendment) Regulations, 2000, w.e.f.
8-8-2000. Prior to its substitution, regulation 13 A read as under :
“13 A. Debenture Trustee not to act for an associate – No debenture trustee shall act as such for any issue of debentures in case-
(a) the debenture trustee,-
(i) is an associate of the body corporate;
(ii) beneficially holds shares in the company;
(iii) is a promoter, director or key managerial personnel or any other officer or an employee of the company or its holding, subsidiary or associate company;
(iv) is beneficially entitled to moneys which are to be paid by the company otherwise than as remuneration payable to the debenture trustee;
(v) is indebted to the company, or its subsidiary or its holding or associate company or a subsidiary of such holding company;
(vi) has furnished any guarantee in respect of the principal debts secured by the debentures or interest thereon;
(vii) has any pecuniary relationship with the company amounting to 2% or more of its gross turnover or total income or ₹50 lakh or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year;
(viii) is relative of any promoter or any person who is in the employment of the company as a director or key managerial personnel;
(ix) is likely to have conflict of interest in any other manner:
Provided that this requirement shall not be applicable in respect of debentures issued:
(i) wherever there is guarantee by the state / central government for the debentures issued.]
(b) it has lent and the loan is not yet fully repaid or is proposing to lend money to the body corporate:
Provided that this requirement shall not be applicable in respect of debentures issued prior to the commencement of the Companies (Amendment) Act, 2000, where—
(i) recovery proceedings in respect of the assets charged against security has been initiated, or
(ii) the body corporate has been referred to Board for Industrial and Financial Reconstruction under the Sick Industrial Companies (Special Provisions) Act, 1985, prior to commencement of the Securities and Exchange Board of India (Debenture Trustees) (Amendment) Regulations, 2003.]
(a) it is an associate of the body corporate, or
(b) it has lent or is proposing to lend money to the body corporate :
Provided that in respect of debentures issued prior to the commencement of these regulations, the debenture trustee for such issue shall also comply with this regulation within two years from the commencement of these Regulations.” 58 Regulation 13A and clause (a) thereunder substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2017, w.e.f., 13-7-2017. Prior to such substitution, the provisions read as follows:
“No debenture trustee shall act as such for any issue of debentures in case—
(a) it is an associate of the body corporate, or” Obligation of the debenture trustees.
14. 59[Every debenture trustee shall amongst other matters, accept the trust deeds which shall contain the matters as specified in section 71 of Companies Act, 2013 and Form No. SH.12 specified under the Companies (Share Capital and Debentures) Rules, 2014.]
Duties of the debenture trustees.
15. 60[(1) It shall be the duty of every debenture trustee to-
(a) satisfy itself that the prospectus or letter of offer does not contain any matter which is inconsistent with the terms of the issue of debentures or with the trust deed;
59 Substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2017, w.e.f., 13-7-2017. Prior to the same, regulation 14 read as follows:
“Every debenture trustee shall amongst other matters accept the trust deeds which contain the matters specified in Schedule IV to the regulations.” 60 Substituted ibid. Prior to the same, the provision read as follows:
“(1) It shall be the duty of every debenture trustee to—
(a) call for periodical reports from the body corporate;
(b) [***]
(c) take possession of trust property in accordance with the provisions of the trust deed;
(ca) supervise the implementation of the conditions regarding creation of security for the debentures and debenture redemption reserve, wherever applicable;
(d)enforce security in the interest of the debenture holders;
(e)do such acts as are necessary in the event the security becomes enforceable;
(f) carry out such acts as are necessary for the protection of the debenture holders and to do all things necessary in order to resolve the grievances of the debenture holders;
(g)ascertain and satisfy itself that the—
(i)in case where the allotment letter has been issued and debenture certificate is to be issued after registration of charge, the debenture certificates have been despatched by the body corporate to the debenture holders within 30 days of the registration of the charge with the Registrar of Companies;]
(ii) debenture certificates have been despatched to the debenture holders in accordance with the provisions of the Companies Act;
(iii) interest warrants for interest due on the debentures have been despatched to the debenture holders on or before the due dates;
(iv) debenture holders have been paid the monies due to them on the date of redemption of the debentures;
(h)ensure on a continuous basis that the property charged to the debentures is available and adequate at all times to discharge the interest and principal amount payable in respect of the debentures and that such property is free from any other encumbrances save and except those which are specifically agreed to by the debenture trustee;]
(i) exercise due diligence to ensure compliance by the body corporate, with the provisions of the Companies Act, the listing agreement of the stock exchange or the trust deed;
(j) to take appropriate measures for protecting the interest of the debenture holders as soon as any breach of the trust deed or law comes to his notice;
(k) to ascertain that the debentures have been converted or redeemed in accordance with the provisions and conditions under which they are offered to the debenture holders;
(l) inform the Board immediately of any breach of trust deed or provision of any law;
(m) appoint a nominee director on the Board of the body corporate in the event of:
(i) two consecutive defaults in payment of interest to the debenture holders; or
(ii) default in creation of security for debentures; or
(iii) default in redemption of debentures;
(n) communicate to the debenture holders on half yearly basis the compliance of the terms of the issue by the body corporate, defaults, if any, in payment of interest or redemption of debentures and action taken therefor.” http://www.taxmann.net/SEBI/SEBI2005/ftn7chp3_15m_Div4p4_166.htm
(b) satisfy itself that the covenants in the trust deed are not prejudicial to the interest of the debenture holders;
(c) call for periodical status/ performance reports from the issuer company within 7 days of the relevant board meeting or within 45 days of the respective quarter whichever is earlier;
(d) communicate promptly to the debenture holders defaults, if any, with regard to payment of interest or redemption of debentures and action taken by the trustee therefor;
(e) appoint a nominee director on the Board of the company in the event of:
(i) two consecutive defaults in payment of interest to the debenture holders; or
(ii) default in creation of security for debentures; or
(iii) default in redemption of debentures.
(f) ensure that the company does not commit any breach of the terms of issue of debentures or covenants of the trust deed and take such reasonable steps as may be necessary to remedy any such breach;
(g) inform the debenture holders immediately of any breach of the terms of issue of debentures or covenants of the trust deed;
(h) ensure the implementation of the conditions regarding creation of security for the debentures, if any, and debenture redemption reserve;
(i) ensure that the assets of the company issuing debentures and of the guarantors, if any, are sufficient to discharge the interest and principal amount at all times and that such assets are free from any other encumbrances except those which are specifically agreed to by the debenture holders;
(j) do such acts as are necessary in the event the security becomes enforceable;
(k) call for reports on the utilization of funds raised by the issue of debentures;
(l) take steps to convene a meeting of the holders of debentures as and when such meeting is required to be held;
(m) ensure that the debentures have been converted or redeemed in accordance with the terms of the issue of debentures;
(n) perform such acts as are necessary for the protection of the interest of the debenture holders and do all other acts as are necessary in order to resolve the grievances of the debenture holders;
(o) take possession of trust property in accordance with the provisions of the trust deed;
(p) to take appropriate measures for protecting the interest of the debenture holders as soon as any breach of the trust deed or law comes to his notice;
(q) ascertain and satisfy itself that,-
(i) in case where the allotment letter has been issued and debenture certificate is to be issued after registration of charge, the debenture certificates have been dispatched by the body corporate to the debenture holders within 30 days of the registration of the charge with the Registrar of Companies;
(ii) debenture certificates have been dispatched to the debenture holders or debentures have been credited in the demat accounts of the debenture holders in accordance with the provisions of the Securities and Exchange Board of India (Debenture Trustee) Regulations 1993, Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations 2008, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and any other regulations issued by the Board;
(iii) interest warrants for interest due on the debentures have been dispatched to the debenture holders on or before the due dates;
(iv) debenture holders have been paid the monies due to them on the date of redemption of the debentures;
(r) inform the Board immediately of any breach of trust deed or provision of any law, which comes to the knowledge of the trustee.
Explanation: The communication to the debenture holders by the debenture trustee as mentioned in these regulations may be made by electronic media, press-release and placing notice on its website;
(s) exercise due diligence to ensure compliance by the body corporate, with the provisions of the Companies Act, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement), Regulations, 2015, the listing agreement of the stock exchange or the trust deed or any other regulations issued by the Board pertaining to debt issue;
(t) In case where listed debt securities are secured by way of receivables/ book debts it shall obtain the following,-
(i) On Quarterly basis-
(a) Certificate from the Director / Managing Director of the issuer company certifying the value of the book debts / receivables;
(b) Certificate from an independent chartered accountant giving the value of book debts / receivables.
(ii) On Yearly basis-
(a) Certificate from the statutory auditor giving the value of book debts / receivables.]
61[(1A) The debenture trustee shall:
(a) obtain reports from the lead bank regarding progress of the project;
(b) monitor utilisation of funds raised in the issue;
62[(c) obtain a certificate from the issuer's Statutory Auditor:
(i) in respect of utilisation of funds during the implementation period of the project; and 61 Inserted by the Amendment to the SEBI (Debenture Trustees) Regulations, 1993 made by Schedule XX to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 w.e.f. 26-08-2009.
62 Substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2017, w.e.f., 13-7-2017. Prior to the same, clause (c) read as follows:
“obtain a certificate from the issuer's auditors:
(i) in respect of utilisation of funds during the implementation period of the project; and
(ii) in the case of debentures issued for financing working capital, at the end of each accounting year.”
(ii) in the case of debentures issued for financing working capital, at the end of each accounting year.]]
(2) A debenture trustee shall call or cause to be called by the body corporate a meeting of all the debenture holders on—
(a) a requisition in writing signed by at least one-tenth of the debenture holders in value for the time being outstanding;
(b) the happening of any event, which constitutes a default or which in the opinion of the debenture trustees affects the interest of the debenture holders:
63[Provided that a debenture trustee may seek the consent of debenture holders through e-voting, wherever applicable;
Provided further that the requirement to convene a meeting of all debenture holders in case of a default in payment obligation by the issuer, shall not be applicable in case of debentures issued by way of public issue.]
64[(3) No debenture trustee shall relinquish its assignments as debenture trustee in respect of the debenture issue of any body corporate, unless and until another debenture trustee is appointed in its place by the body corporate.
(4) A debenture trustee shall maintain the networth requirements as specified in these regulations on a continuous basis and shall inform the Board immediately in respect of any shortfall in the networth and in such a case it shall not be entitled to undertake new assignments until it restores the networth to the level of specified requirement within the time specified by the Board.
(5) A debenture trustee may inspect books of account, records, registers of the body corporate and the trust property to the extent necessary for discharging its obligations.]
Code of Conduct.
16. Every debenture trustee shall abide by the Code of Conduct as specified in Schedule III.
Maintenance of books of account, records, documents, etc.
17. 65[(1) Subject to the provisions of any law every debenture trustee shall keep and maintain proper books of account, records and documents, relating to the trusteeship functions for a period of not less than five financial years from the date of redemption of debentures.]
(2) Every debenture trustee shall intimate to the Board, the place where the books of account, records and documents are maintained.
66[Appointment of compliance officer.
63 Inserted by the Securities and Exchange Board of India (Debenture Trustees) (Amendment) Regulations, 2019 w.e.f. May 07, 2019 64 Inserted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2003, w.e.f, 4-7-2003.
65 Substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2017, w.e.f., 13-7-2017. Prior to the same, sub-regulation (1) read as follows:
“(1) Subject to the provisions of any law every debenture trustee shall keep and maintain proper books of account, records and documents, relating to the trusteeship functions for a period of not less than five financial years preceding the current financial year.” 66 Inserted by the SEBI (Investment Advice by Intermediaries)(Amendment) Regulations, 2001, w.e.f. 29-5- 2001