Sebi Proposes Amendments To Securitised Debt Instrument Rules As Existing Rules Conflict With RBI Directions

Sebi Proposes Aligning Securitised Debt Rules

The Securities and Exchange Board of India has issued a consultation paper proposing amendments to its framework for securitised debt instruments (SDIs). The exercise is intended to reconcile Sebi's regulations with the Reserve Bank of India's September 2021 directions on securitisation of standard assets, which apply to entities regulated by the central bank. Public comments are invited until May 25, 2026. The regulator has said the changes are meant to narrow regulatory gaps, improve ease of doing business and support the growth of the listed securitisation market. The review follows a December 2024 board approval and a May 2025 notification restating the securitisation framework, after which market feedback flagged continuing inconsistencies with RBI norms. The Corporate Bonds and Securitisation Advisory Committee examined these issues and recommended further changes.

Key Proposals For Market Participants

Several proposals are aimed at structures that RBI-regulated originators can currently use but cannot list under Sebi rules. Sebi has proposed exempting such entities from the existing cap that prevents any single obligor from accounting for more than 25 per cent of the asset pool, which would permit single-asset securitisation to be listed. The regulator has also proposed relaxing the bar on Special Purpose Distinct Entities acquiring receivables from originators in the same group, a restriction RBI's framework does not impose in the same form. On governance, Sebi has suggested that for RBI-regulated originators, the originator should have no more than one representative on the SPDE board, and that representative should not hold veto power. Disclosure obligations and related certifications may shift from the originator to the servicer, given that the servicer handles collection and monitoring of receivables and may be a third party.

Winding Up And Next Steps

Sebi has also flagged a mismatch on exit. Its current…