What SEBI has done
The Securities and Exchange Board of India (SEBI) has given debenture trustees (DTs) another six months to comply with the requirements for carrying out activities that fall outside SEBI's regulatory purview. Under Circular No. HO/(201)2026-DDHS-POD1/I/24467/2026, dated 27 October 2026, the compliance deadline moves from 27 October 2026 to 27 April 2027.
This is the second extension of the same deadline. It does not change the underlying requirement, and it does not change any other provision of the original framework circular. Trustees who were working towards the October 2026 date now have until April 2027 — but the obligation itself is unchanged, and the extra time is meant for completing the separation work, not for reopening the policy.
💡 In one line: if you are a registered debenture trustee with activities outside SEBI's purview, your deadline to move those activities into separate business units is now 27 April 2027, not 27 October 2026. Everything else in the 25 November 2025 circular stays exactly as it was.
What are debenture trustees, and what is Regulation 9C?
A debenture trustee is a SEBI-registered intermediary appointed to protect the interests of debenture holders — investors who lend money to companies by subscribing to debentures, a type of debt instrument. Trustees act as watchdogs, making sure the issuer meets its obligations to investors.
To strengthen oversight and reduce conflicts of interest, SEBI inserted Regulation 9C into the SEBI (Debenture Trustees) Regulations, 1993, through amendments notified on 27 October 2025. The provision requires a debenture trustee holding a valid certificate of registration to transfer activities that are not regulated by SEBI into one or more separate business units (SBUs), so that SEBI-regulated trustee work is ring-fenced from other business. The operational framework — the terms and conditions for carrying out activities outside SEBI's purview — was prescribed by SEBI's circular of 25 November 2025.
Under that framework, a trustee undertakes activities not regulated by SEBI only on an arm's-length basis through a separate business unit, segregated by a Chinese wall and ring-fenced from its SEBI-regulated activities. Setting up that separation — separate systems, processes, staffing and controls — is the compliance work the deadline governs.
The deadline, step by step
Why SEBI extended it again
The 27 October 2026 circular gives two reasons. First, an Expert Working Group constituted in June 2026 is comprehensively reviewing the regulatory framework for debenture trustees, including the separate business unit framework — so the framework itself is under review while trustees are being asked to implement it. Second, SEBI received further representations from debenture trustee associations highlighting challenges in implementing the SBU-related guidelines.
That combination matters for how trustees should read the extension. It is not a signal that the separation requirement is going away: the circular expressly leaves all other provisions of the 25 November 2025 circular unchanged. It is breathing room while the framework is reviewed and while implementation difficulties are worked through. Trustees should therefore keep building the separation — and track the working group's review, because it may change the framework they are implementing towards.
What stays the same
Everything except the date. The circular states that all other provisions of the 25 November 2025 circular remain unchanged. In practice that means: the obligation to carry out non-SEBI activities only through separate business units, on an arm's-length basis, segregated and ring-fenced, is untouched; the scope of what counts as an activity outside SEBI's purview is untouched; and no new exemption, relaxation or reporting concession has been added by this circular.
The circular is addressed to all registered debenture trustees and to recognised stock exchanges. It is issued under Section 11(1) of the SEBI Act, 1992, read with Regulation 2A of the SEBI (Debenture Trustees) Regulations, 1993, with the approval of the competent authority, and it was signed by Rohit Dubey, General Manager, in SEBI's Department of Debt and Hybrid Securities.
What trustees should do now
1. Reset the programme date, not the programme. Update board and compliance calendars from 27 October 2026 to 27 April 2027, and keep the separation workstreams — systems, Chinese wall arrangements, staffing and controls — running. The extension is time, not a pause.
2. Document the implementation challenges. SEBI has now twice cited industry representations on SBU implementation difficulties. If your trustee entity faces specific blockers — system builds, client transitions, staffing — record them, because the working group's review is the forum where those issues are being considered.
3. Watch the working group review. A comprehensive review of the debenture trustee framework, including the SBU framework, is under way. Any change it produces could alter what trustees must build, so milestone plans should be flexible enough to absorb a revised framework before April 2027.
4. Do not treat April 2027 as automatic. SEBI has extended twice, but each extension has been a specific decision with stated reasons. There is no standing promise of a third extension, and the circular gives no indication that one will follow.
Frequently asked questions
What is the new deadline for debenture trustees to comply with Regulation 9C?
27 April 2027. SEBI's circular of 27 October 2026 extends the deadline by six months from 27 October 2026.
What exactly must be separated by that date?
Activities carried out by a debenture trustee that fall outside SEBI's regulatory purview must be transferred to one or more separate business units, undertaken on an arm's-length basis and ring-fenced from SEBI-regulated trustee activities.
Has SEBI changed any other rule in this circular?
No. All other provisions of the 25 November 2025 circular remain unchanged; only the compliance timeline has moved.
Why did SEBI extend the deadline?
Because an Expert Working Group constituted in June 2026 is comprehensively reviewing the debenture trustee framework, including the SBU framework, and because debenture trustee associations made further representations about challenges in implementing the SBU guidelines.
Does this extension apply to all debenture trustees?
The circular is addressed to all registered debenture trustees and recognised stock exchanges, so it applies across registered trustees carrying on activities outside SEBI's purview.
Sources
SEBI Circular No. HO/(201)2026-DDHS-POD1/I/24467/2026, dated 27 October 2026 — Extension of timeline for compliance with terms and conditions by Debenture Trustees for carrying out activities outside the purview of SEBI (official SEBI circular page and PDF). SEBI Circular of 28 April 2026 (first extension, to 27 October 2026). SEBI Circular of 25 November 2025 (framework for activities outside SEBI's purview). This article is general information only and is not legal advice; trustees should confirm their position with their compliance advisers.
