Notification F. No. SEBI/LAD-NRO/GN/2025/247, Dated: 05.05.2025
The Securities and Exchange Board of India (SEBI) has notified a key amendment to the SEBI (Issue and Listing of Securitised Debt Instruments and Security Receipts) Regulations, 2008, aimed at strengthening transparency and investor protection in the securitisation market. The amendment introduces a new provision—Regulation 10A—which mandates periodic disclosures by the originator of the securitised debt instruments.
1. Key Highlights of the Amendment
- Quarterly Performance Reporting to Trustees – Under the newly inserted Regulation 10A, originators are now required to submit periodic performance reports to the trustee of the securitisation trust. These reports must include relevant information about the performance of the underlying asset pool and must be submitted at least on a quarterly basis. This move is expected to enhance oversight and monitoring mechanisms, ensuring that trustees and investors remain informed about the asset quality and cash flow status.
- Mandatory Auditor’s Certificate – In addition to the periodic reports, the originator must also obtain and furnish a certificate from its statutory auditor. This certificate should confirm the accuracy and adequacy of the disclosures pertaining to the underlying asset pool that has been assigned to the securitisation trust. The requirement of an independent audit aims to lend credibility to the disclosures and instill greater confidence among stakeholders.
2. Implications
- For Originators – This increases their compliance obligations, requiring enhanced documentation, internal monitoring, and engagement with auditors.
- For Trustees – Trustees gain access to regular and authenticated data, enabling them to better perform their fiduciary duties and ensure the interests of investors are protected.
- For Investors – The amendment promotes greater transparency and reduces information asymmetry, enabling more informed investment decisions.
3. Objective
This amendment aligns with SEBI’s broader regulatory objective of promoting market integrity, transparency, and investor protection in the securitised debt market. It also brings Indian regulations closer to global best practices in structured finance disclosures.
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