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CS Professional · Strategic Management and Corporate Finance · Role of Intermediaries in Fund Raising

Under the SEBI framework for non-convertible debt securities, a company proposing a public issue of secured debentures must, before opening the issue, appoint which intermediary to protect the interests of debenture holders?

The company must appoint a SEBI-registered debenture trustee. The trustee represents debenture holders, oversees creation and maintenance of security, and monitors the issuer's compliance with the trust deed. Other intermediaries such as portfolio managers, transfer agents or brokers do not perform this protective function.

  1. AA debenture trustee registered with SEBICorrect
  2. BA portfolio manager registered with SEBI
  3. CA share transfer agent only
  4. DA stock broker of the recognised exchange

Explanation

For listed non-convertible debentures the issuer must appoint a SEBI-registered debenture trustee, who acts for debenture holders, holds or oversees security and monitors compliance with the trust deed. A portfolio manager, a transfer agent and a broker do not perform this protective role for debenture holders.

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