SEBI: Securitised Debt Issuers To Include Periodic Disclosure Mandates

In a bid to make India's securitisation market more transparent and investor-friendly, the Securities and Exchange Board of India (SEBI) has proposed new rules. They're suggesting that anyone issuing securitised debt instruments. Bundled loans or receivables sold as investments must start sharing detailed reports every six months. These need to be submitted within 21 days after each half-year ends, so think at the end of March and September.

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Why Now? What's the Bigger Picture?

SEBI's move isn't out of the blue. It follows a detailed review aimed at aligning its rules from 2008 with the newer guidelines from the Reserve Bank of India, which updated its stance in 2021. The goal? Cleaner data, better oversight, and smoother operations for everyone involved in these complex financial transactions.

What Do Issuers Need to Disclose? Let's Break It Down.

For loan-backed instruments (like those tied to home loans or business debt), trustees will need to report on things like:

• When the underlying loans mature
• How many loans are overdue or unpaid
• Prepayment and recovery trends
• Key risk metrics like loan-to-value ratios
• Structural features like credit buffers or liquidity support
• And even things like the geographic spread of borrowers

For non-loan SDIs (such as trade receivables), the checklist is a bit different:

• How much cash came in vs what was projected
• Any missed payments or defaults
• Early repayments and how credit support was used
• Major structural tweaks
• Material risks that could impact investors

What Gives SEBI the Power to Do This?

This proposal is backed by SEBI's legal authority under the SEBI Act, 1992, specifically Section 11(1), and some key regulations within the SDI framework. It's all about striking a balance between investor protection and smart market growth.

SEBI is seeking feedback from all parties involved, including originators, trustees, credit rating agencies, and investors. You can share your thoughts through SEBI's online portal until July 7, 2025. They're not just asking for opinions; they want you to rate each clause so they can carefully shape the final version.

How This Fits Into the Bigger Picture

This isn't SEBI's first move toward more transparency. Just a few months ago, in April 2025, they rolled out rules for prominent debt placements (₹20 crore and above) to go through an Electronic Book Platform. And before that, they put together disclosure frameworks for ESG-labelled bonds. It's all part of a larger effort to create data-driven, transparent markets that protect investors and operate efficiently.

Most analysts are on board. Regular updates will provide investors and credit rating agencies with a better understanding of what they're buying and should help price these deals more accurately. It also brings SEBI's rules into line with the RBI's, thereby reducing confusion.

Still, some industry folks, especially from smaller firms, worry about the workload. Gathering detailed loan data twice a year isn't simple. SEBI acknowledges this but notes that automation will lighten the load over time.

Once the consultation period concludes, SEBI will finalise the rules. If all goes to plan, companies will start following them from the half-year ending September 30, 2025, with the first reports due in October or November 2025.

Final Thoughts

If this goes through, it'll be a big deal for India's financial markets. Better data means more trust, fairer pricing, and more investors joining in. Sure, the transition might be challenging for smaller players, but in the long run, this could make India's securitisation space stronger, more transparent, and closer to global standards.