SEBI Tightens Grip on Securitised Debt Instruments with New Rules

The Securities and Exchange Board of India (SEBI) has set a minimum investment threshold of Rs 1 crore for RBI-regulated and unregulated entities in securitisation. The regulations mandate a three-year track record for originators and stipulate that public offers must remain open for three to ten days.

The Securities and Exchange Board of India (SEBI) has introduced new regulations for securitised debt instruments (SDIs), setting a minimum investment threshold of Rs 1 crore for originators, both regulated and unregulated by the Reserve Bank of India (RBI).

Securitised Debt Instruments, financial products that pool various types of debt such as loans and mortgages, are sold as securities to investors. SEBI's new regulations aim to convert illiquid assets into liquid ones, providing an alternative funding source.

Key changes include a mandated three-year track record for originators, risk retention requirements, and adjustable public offer periods. The regulator also emphasized a minimum holding period requirement and optional clean-up calls to enhance risk management and align securities' issuance with non-convertible securities standards.

(With inputs from agencies.)