Debenture trustee is a person or agency appointed as a trustee to protect the interest of the

debenture holder and keep the companies assets charged against debenture
DEBENTURE TRUST DEED - A debenture trust deed is an instrument that a
company executes in favour of a debenture trustee, thereby appointing them
and defining their role and duties to protect the interest of debenture holders
before debentures are offered for public subscription.

A company before issuing a prospectus or a letter of offer to the public for

the subscription of its debentures is required to appoint one or more
debenture trustees for such debentures to look after the interest of
debenture holders.

A company has to execute a debenture trust deed within sixty days from the
date of allotment of debentures.
As per the circular issued by the SEBI, The company will have to create a
charge as specified in the offer document in favour of the debenture trustee

It contains terms and conditions of debentures as well as rights of debenture

holders.

As per Section 71(5) of the Companies Act, 2013 when a company wants to
issue debentures to more than 500 members then the company has to
execute a debenture trust deed appointing trustees to protect the interests of
debenture holders.

As per Rule 8 of the Share Capital and Debenture Rules, 2014 members as
well as debenture holders can inspect the deed and can also get a copy of it
by paying a certain fee. The company has to forward the debenture trust
deed `within seven days of making the payment.

As per Rule 18(2)(e) of the Share Capital and Debenture Rules, 2014,
debenture holders can remove a debenture trustee from the office before
completion of its tenor when it is approved by the debenture holders holding
at least three fourth in value of the debentures outstanding

Who can become a debenture trustee?

Only entities registered with SEBI can become debenture trustees.
Regulation 7 of SEBI Debenture Trustee Regulations, 1993 lays down the
eligibility criteria for becoming a debenture trustee. Any person willing to be
a debenture trustee should be:

1. a scheduled bank carrying on commercial activity; or

2. a public financial institution within the meaning of Section 4A of the
Companies Act, 1956; or
3. an insurance company; or
4. a body corporate

Who is a debenture trustee?

1. Debenture Trustee is a person or agency who is appointed by way of
Debenture Trust Deed to safeguard debenture holders’ interests and to
address their grievances.
2. Debenture trustee is appointed before prospectus or letter of allotment
is issued or within 60 days after the allotment of debentures.
3. A company can have more than one debenture trustee.
4. The debenture trustee should not be in any way associated with the
company
5. Debenture holders do not get any voting rights in the company so to
ensure that their money is not misused by the company, a debenture
trustee is appointed to look after their interests.
6. SEBI issued Debenture Trustee Regulations, 1993 to lay down
eligibility criteria to become debenture trustees and regulate the
conduct of debenture trustees.
7. The company creates a charge on the movable or immovable assets of
its subsidiary and holding company and this charge is created in favour
of the debenture trustee.
8. Trustees become custodians of the assets on which charge has been
created
9. As per the Companies Act, 2013 every company issuing debentures to
more than 500 members has to appoint a debenture trustee.
10.