Trustee management software for debenture, security and escrow trustees

What is trustee management software?

It is the operations system of a trusteeship company. It holds each mandate's documents, security details, covenants and key dates, raises alerts before deadlines, produces regulatory reports and bills clients.

A trusteeship company acts for other people: debenture holders, a consortium of lenders or the parties to an escrow. A mid-sized trustee can hold hundreds or thousands of live mandates, each with its own trust deed, security package, covenants and payment calendar. Spreadsheets and email can't reliably tell you, on any given morning, which issuer's interest is due, which security cover certificate is late or which pledge needs releasing. Trustee management software keeps that record and flags the next action.

What do debenture, security, escrow, lenders' agent and share pledge trustees do?

Each role protects a different party in a financing transaction. Debenture trustees act for debenture holders, security trustees hold security for lenders, escrow trustees hold assets until agreed conditions are met, lenders' agents administer a loan for a lender group, and share pledge trustees hold pledged shares.

These descriptions are general. The exact duties in any mandate come from its trust deed or agreement and, for debenture trustees, from SEBI regulation.

What do SEBI rules require of debenture trustees?

Debenture trustees must be registered with SEBI under the SEBI (Debenture Trustees) Regulations, 1993, and follow the Master Circular for Debenture Trustees dated August 13, 2025. Together these set out due diligence, security and covenant monitoring, periodic certification and default handling.

The Regulations define a debenture trustee as "a trustee appointed in respect of any issue of debentures of a body corporate" ^[1]. SEBI grants registration certificates to debenture trustees under the Regulations, which were last amended on October 27, 2025 ^[1]. Regulation 15 lists their duties. Those that create time-bound work for a system include ^[1]:

• Calling for periodical status or performance reports from the issuer within 7 days of the relevant board meeting or within 45 days of the respective quarter, whichever is earlier.
• Communicating defaults in payment of interest or redemption of debentures promptly to debenture holders, together with the action taken.
• Appointing a nominee director on the issuer's board if there are two consecutive defaults in interest payment, a default in creating security or a default in redemption.
• Ensuring that conditions on creating security, the debenture redemption reserve and the recovery expense fund are implemented.
• Ensuring that the assets of the issuer and any guarantors are sufficient to discharge interest and principal at all times.
• Calling for reports on how funds raised by the issue are used, and ensuring debentures are converted or redeemed according to the terms of issue.

SEBI's Master Circular for Debenture Trustees (SEBI/HO/DDHS-PoD-1/P/CIR/2025/117, August 13, 2025) consolidates the operating framework. Its chapters cover terms of registration, due diligence, the Security and Covenant Monitoring System, the recovery expense fund, security cover certificates, periodical and continuous monitoring, website disclosures, debenture trust deeds and information sharing, investor grievances, breach of covenants and default, and defaulted debt securities after maturity ^[2]. Operationally significant points include ^[2]:

• Due diligence: the trustee prepares or obtains reports such as valuation, ROC search and title search reports and a security cover certificate, and issues a due diligence certificate. Due diligence records are kept for five years from redemption of the debt securities.
• Encumbrance checks: before security is created, the trustee verifies existing charges from the ROC, the sub-registrar, CERSAI, information utilities or other sources.
• Security and Covenant Monitoring System: depositories host this platform for security creation and for monitoring security cover and covenants. The trustee validates the covenants the issuer enters within seven working days of signing the debenture trust deed, and uploads its reports and certificates to the system.
• Security cover certificate: debenture trustees certify security cover quarterly and submit it within 75 days from the end of each quarter, or within 90 days for the last quarter.
• Recovery expense fund: issuers deposit a fund that the trustee can use, with holders' consent, to take enforcement or legal action after a default.

What is CERSAI and why does it matter to trustees?

CERSAI, the Central Registry of Securitisation Asset Reconstruction and Security Interest, is the central registry set up under Section 20 of the SARFAESI Act, 2002, to register securitisation, asset reconstruction and security interest transactions. Trustees use its records to check and evidence charges on assets.

Section 20 of the SARFAESI Act lets the Central Government set up a Central Registry "for the purposes of registration of transaction of securitisation and reconstruction of financial assets and creation of security interest under this Act" ^[3]. The Act states that these provisions are in addition to, and not in derogation of, other laws requiring registration of charges, such as the Companies Act ^[3].

For a trustee, CERSAI is one of several registries whose records have to be tracked for each mandate, alongside ROC charge filings and sub-registrar records. SEBI's Master Circular lists CERSAI among the sources a debenture trustee checks for existing charges and among the evidence of charge registration ^[2]. Trustee software typically records, for each asset, where the charge is registered, the registration evidence and any modification or satisfaction.

Why do trustee companies automate their operations?

Because trustee obligations run on fixed dates across many mandates, missing one can harm investors and lead to regulatory action. Automation turns deadlines into alerts, keeps documents retrievable and ties fees to mandates.

• Deadline control: interest, redemption and covenant dates, quarterly certificates and issuer reporting windows become scheduled alerts instead of calendar entries kept by individuals.
• Document custody: trust deeds, security documents, title papers and certificates are scanned, indexed by mandate and opened under access controls, with a record of who viewed what.
• Consistent documents: letters, notices and certificates are generated from approved templates.
• Four-eyes control: maker-checker approval on sensitive entries such as security details, releases and reports.
• Billing and accounting: acceptance fees, annual fees and out-of-pocket recoveries are raised against each mandate and posted to the ledger.
• Regulatory reporting: returns and disclosures are compiled from the same data instead of separate spreadsheets.

What should a trustee company check before buying trustee software?

Check that it covers every trusteeship type you offer, models security and covenants per mandate, drives alerts from real dates, controls documents and approvals, and connects operations to billing, accounting and reporting.

• Mandate coverage: debenture, security, escrow, lenders' agent and share pledge mandates on one platform.
• Security register: assets, charge registrations (ROC, sub-registrar, CERSAI), valuations, insurance and releases for each mandate.
• Covenant and date engine: interest, redemption, reporting and certificate due dates, with escalating alerts.
• Document management: templates, scanning, indexing, controlled access and audit logs.
• Approvals: configurable maker-checker workflows.
• SEBI and RBI reporting: which reports can be produced from system data, and how quickly formats can be updated when SEBI revises its circulars.
• Finance: integrated billing, financial accounting with real-time ledgers and fixed asset records.
• Internal operations: whether HR and payroll are included or need a separate system.
• Data migration: loading legacy mandates, documents and historical dates.
• Vendor fit: years supporting trusteeship companies and reference clients in the segment.

This guide summarises regulation for general information and is not legal advice. SEBI regulations and master circulars are amended from time to time. Always refer to the current text on sebi.gov.in and to your own trust documents.

Where does LCode's RTMS fit?

Reach Trustee Management Suite (RTMS) is LCode Technologies' centralized automation software for capital trustee companies, launched in 2015. It supports security, debenture, escrow, lenders' agent and share pledge trustee services on one platform.

About LCode: this section describes LCode Technologies' own product. RTMS maps to the workflows above as follows:

Frequently asked questions