SEBI aligns securitisation with RBI
- SEBI on May 4 put out a consultation paper to rewrite listed securitisation rules, bringing its SDI regime closer to the RBI’s 2021 framework. - The biggest switch is practical: RBI-regulated originators could bypass SEBI’s 25% single-obligor pool cap, making listed single-asset deals possible. - That matters because listed securitisation has lagged partly on rule mismatch — and SEBI is now trying to remove the awkward overlap.
Securitisation is one of those market plumbing topics that sounds niche until you see what is actually being fixed. This is about how banks and NBFCs package loans or receivables, sell them into a pool, and then raise money against that pool. India already had an RBI framework for that. SEBI had a listed-market framework for securitised debt instruments. The problem was that the two did not line up cleanly. On May 4, SEBI moved to close that gap. (sebi.gov.in) ### What changed on May 4? SEBI released a consultation paper proposing amendments to the rules for securitised debt instruments and security receipts. The whole idea is to harmonise SEBI’s listed-market regime with the RBI’s securitisation directions, especially for transactions originated by RBI-regulated entities. This is still a proposal, not a final rule, but it is a pretty direct signal about where the regulator wants the market to go. (sebi.gov.in) ### Why was the old setup awkward? Because one regulator allowed structures that the other one effectively blocked from listing. SEBI’s current rule caps exposure to a single obligor at 25% of the asset pool. That makes sen(sebi.gov.in)itisation in some cases. (economictimes.indiatimes.com) ### So what is the big unlock? SEBI wants to exempt RBI-regulated entities from that single-obligor concentration limit. Basically, if the originator already sits inside RBI’s prudential framework, SEBI is willing to stop layering on a conflicting restriction for listed deals. That would open the door for listed single-asset securitisation transactions — the headline change everyone noticed first. (economictimes.indiatimes.com) ### Is it only about single-asset deals? No — the consultation is broader. SEBI also proposed replacing mandatory winding-up of a securitisation scheme, when a trustee’s registration is suspended or cancelled, with the appointment of a new truste(economictimes.indiatimes.com)e that treatment more workable. (economictimes.indiatimes.com) ### What else gets easier? Related-party structuring, at least in a narrow sense. SEBI proposed removing restrictions that bar transactions between an originator and a special-purpose distinct entity in the same group, provided the originator is (economictimes.indiatimes.com) ongoing basis. (economictimes.indiatimes.com) ### Why does disclosure responsibility matter? Because listed securitisation only works if investors keep getting clean performance data after issuance. Moving that duty to the servicer is a small but telling change. It recognizes who actually ha(economictimes.indiatimes.com)different entities. That last point is an inference from the structure SEBI is proposing. (economictimes.indiatimes.com) ### Why is SEBI doing this now? Turns out this is part of a longer cleanup. SEBI already reviewed the securitised debt framework in late 2024, and the regulations were amended in May 2025. The May 2026 paper looks like the next round — narrower, but more targeted at specific mismatches that market participants flagged after living with both regimes. (sebi.gov.in) ### Bottom line? This is not a flashy reform. But it is the kind that can actually change issuance behavior. If SEBI follows through, listed securitisation in India gets closer to the RBI rulebook, single-asset deals become easier to bring to market, and a chunk of avoidable regulatory friction disappears. (sebi.gov.in)
