What rights does a debenture trustee have?
What rights does a debenture trustee have used to be answered mostly by reading its duties backwards. The regulations listed extensive obligations, and the powers needed to discharge them were implied or written into individual contracts. SEBI changed that in October 2025 by inserting a regulation that states the rights directly. This guide covers the three codified rights, the operational powers spread across SEBI's master circular, and the limits on all of them. It is not investment advice.
Definition
Regulation 15A
of the SEBI (Debenture Trustees) Regulations, 1993 is titled rights of debenture trustees exercisable to aid in performance of their duties, obligations, roles and responsibilities. Inserted with effect from October 27, 2025, it gives a trustee rights of inspection, to call for information and documents, and to utilise the Recovery Expense Fund. Source: SEBI.
What rights does a debenture trustee have under Regulation 15A?
The SEBI (Debenture Trustees) (Amendment) Regulations, 2025 inserted Regulation 15A with effect from October 27, 2025. Its heading frames the whole provision: these are rights exercisable to aid in performance of the trustee's duties, obligations, roles and responsibilities. The rights exist for the job, not independently of it.
There are three sub regulations.
| Right | Scope |
|---|---|
| 15A(1) Inspection | May inspect the books of account, records and registers of the issuer, and the trust property, to the extent necessary for discharging its obligations |
| 15A(2) Calling for information | May call for information and documents from the issuer with respect to the issue, and documents from such intermediaries as the Board may specify from time to time |
| 15A(3) Recovery Expense Fund | May utilise the Recovery Expense Fund, with the consent of the debenture holders, in the manner specified by the Board |
Each carries its own limiting phrase. The inspection right is bounded by what is necessary to discharge obligations. The right to call for documents from intermediaries reaches only those the Board specifies. And the fund can be used only with holder consent and in the manner the Board specifies.
October 27, 2025
Date from which Regulation 15A, codifying debenture trustee rights, took effect
Source: SEBI (Debenture Trustees) (Amendment) Regulations, 2025, footnote to Regulation 15A of the SEBI (Debenture Trustees) Regulations, 1993
There is a sequencing point worth noting for anyone citing these rules. SEBI's Master Circular for Debenture Trustees, SEBI/HO/DDHS-PoD-1/P/CIR/2025/117, is dated August 13, 2025. Regulation 15A took effect on October 27, 2025. A master circular consolidates circulars, so it does not move when the regulations beneath it are amended. The circular therefore predates this regulation and does not reflect it.
What else did the October 2025 amendment change?
The same amendment made four other changes to the DT Regulations, all effective October 27, 2025:
- Inserted Regulation 2(1)(aaa), defining Board as the Securities and Exchange Board of India established under sub section (1) of section 3 of the Act
- Inserted Regulation 9C on permitted activities, allowing a trustee to undertake certain other activities on an arms length basis through separate business units
- Substituted Regulation 14 on the obligation to accept trust deeds, tying the deed to the format specified under Regulation 18(1) of the NCS Regulations and adding a key summary sheet proviso for deviations
- Omitted sub regulation (5) of Regulation 15
The Regulation 14 change is covered separately in what is a debenture trust deed, including why the old two part Part A and Part B structure of the deed is no longer a regulatory requirement.
How does the Recovery Expense Fund right interact with the circular?
The circular already required holder consent before the fund was released. Chapter IV paragraph 2.1 provides that on a default the debenture trustee or lead debenture trustee obtains the consent of holders of debt securities for enforcement or legal proceedings and informs the designated stock exchange, which releases the amount within five working days.
Regulation 15A(3) now places the same consent condition in the parent regulations rather than only in a circular, and frames the trustee's access to the fund as a right subject to that consent. The mechanics of the fund, including how it is sized and refunded, are in what is a Recovery Expense Fund.
What powers does the master circular give a trustee?
Regulation 15A states the general rights. The master circular gives a trustee specific, operational powers at defined moments, and these are the ones that bite in practice.
- Reject an entry and hold up an issue. Under Chapter III paragraph 5.1(c), where recorded asset details are not in line with the terms of the proposed issue, the trustee shall not validate them and shall reject them on the Security and Covenant Monitoring System with remarks, before issuance of the ISIN is initiated
- Verify against registries rather than the issuer. Under Chapter II paragraph 2.2.2(a), the trustee verifies from the ROC, sub registrar, CERSAI, an IBBI information utility or other sources where the charge is registered
- Appoint and pay its own professionals. Under Chapter II paragraph 2.2.2, due diligence may be carried out through a practicing chartered accountant, practicing company secretary, registered valuer or legal counsel appointed and compensated by the trustee
- Put existing charge holders on notice. Under Chapter II paragraph 2.2.2(a)(ii), the trustee intimates existing charge holders about a proposed further charge and seeks objections within five working days
- Refuse to take the issuer's word on the fund. Under Chapter IV paragraph 4.1, the trustee takes written confirmation from the designated stock exchange or another independent source about creation of the Recovery Expense Fund, and shall not rely solely on the issuer's communication
- Demand an explanation on falling cover. Under Chapter V paragraph 2.3, where computed security cover has reduced against the previous quarter, the trustee records the reason and may obtain clarification from the issuer
- Act on a covenant breach. Under Chapter VI paragraph 2.2(c), the trustee initiates action such as accelerated payment, borrowing restriction, restricting dividend before payment, or declaring an event of default, in accordance with the terms of the issue and the deed
What are the limits?
Three, and they matter as much as the rights.
The trust property is protected from the trustee's own costs. Regulation 14A(2) provides that no loss, damage or expenses incurred by the debenture trustee, or by the body corporate that appointed it, shall be met out of the trust property. That is also why the Recovery Expense Fund exists as a separately funded pool.
Disputes with the issuer go to a specified mechanism rather than straight to court. Regulation 14A(1) requires all claims, differences or disputes between a debenture trustee and the body corporate that appointed it, arising out of or in relation to the trustee's activities in the securities market, to be submitted to a resolution mechanism including mediation, conciliation or arbitration, in accordance with the procedure specified by the Board.
And investor grievances run on a fixed clock. Regulation 14B(1) requires the trustee to redress investor grievances promptly and not later than twenty one calendar days from the date of receipt of the grievance, in the manner the Board specifies.
Related reading
How the trustee exercises these powers before an issue is covered in how does a debenture trustee do due diligence. The platform where rejection and validation happen is described in what is the Security and Covenant Monitoring System. For a related trustee role in the equity of a debt issuer, see what is a nominee director on behalf of a debenture trustee.
These rights are powers granted to discharge defined statutory duties, bounded by necessity and by holder consent. Flock reports what issuers and trustees disclose, with the source and the date attached. It is not investment advice.
Frequently asked questions
What rights does a debenture trustee have?
Regulation 15A of the SEBI (Debenture Trustees) Regulations, 1993 gives a trustee three rights to aid performance of its duties: to inspect the issuer's books, records and registers and the trust property; to call for information and documents from the issuer and specified intermediaries; and to utilise the Recovery Expense Fund with debenture holder consent. Source: SEBI.
When did Regulation 15A come into effect?
Regulation 15A was inserted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2025, with effect from October 27, 2025. Because SEBI's Master Circular for Debenture Trustees is dated August 13, 2025, the master circular predates this regulation and does not reflect it. Source: SEBI.
Can a debenture trustee inspect the trust property?
Yes. Regulation 15A(1) provides that a debenture trustee may inspect the books of account, records and registers of the issuer and the trust property, to the extent necessary for discharging its obligations. The right is bounded by necessity rather than being an open inspection power. Source: SEBI.
Can a debenture trustee's expenses be paid from the trust property?
No. Regulation 14A(2) of the SEBI (Debenture Trustees) Regulations, 1993 provides that no loss, damage or expenses incurred by the debenture trustee, or by the body corporate that appointed it, shall be met out of the trust property. Source: SEBI.
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