The regulator has invited public comments on the proposals until May 25, 2026.
Objective and background
SEBI said the proposed changes are intended to harmonise its securitisation regulations with the RBI’s Master Direction on Securitisation of Standard Assets issued in September 2021. The move follows amendments approved by SEBI’s board in December 2024 and notified in May 2025 to update the regulatory framework governing securitisation.
Subsequently, feedback from market participants highlighted differences between SEBI’s regulations and RBI’s directions, particularly for securitisation transactions originated by RBI-regulated entities. These issues were reviewed by the Corporate Bonds and Securitisation Advisory Committee (CoBoSAC), which recommended further changes.
Key proposalsPermitting single-asset securitisation
SEBI has proposed exempting RBI-regulated entities from the requirement that no single obligor should account for more than 25% of the asset pool.
The current rule is designed to prevent concentration risk in securitisation pools. However, SEBI noted that this restriction effectively prevents the listing of securitised debt instruments backed by a single asset, even though such structures are permitted under RBI regulations.
The proposed relaxation is expected to support the development of the listed securitisation market, particularly for RBI-regulated entities that are already subject to prudential oversight.
Disclosure requirements and servicer obligations
SEBI has proposed introducing periodic disclosure requirements and clearly defining the obligations of servicers in securitisation transactions. This is aimed at improving transparency and investor protection in the market.
Governance of SPDE trustees
The consultation paper proposes changes to the constitution of the board of trustees of Special Purpose Distinct Entities (SPDEs). The move seeks to strengthen governance standards and oversight mechanisms in securitisation structures.
Related-party participation in securitisation
SEBI has proposed removing the restriction that prevents originators and SPDEs belonging to the same group from entering into securitisation transactions. The change is intended to align with RBI norms and provide greater flexibility, while still operating within a regulated framework.
Winding up of securitisation transactions
The regulator has also proposed provisions relating to the winding up of securitisation transactions, aimed at providing clarity on closure processes and safeguarding stakeholder interests.
Rationale
SEBI said the proposals are aimed at reducing regulatory divergence, improving ease of doing business, and fostering growth in the securitisation market. Aligning with RBI’s framework is expected to facilitate smoother participation by regulated entities and enhance market efficiency.
The consultation paper reflects SEBI’s broader effort to update and streamline the securitisation regulatory regime in line with evolving market practices and prudential norms.
Public comments on the proposals will inform the final regulatory changes.
