Sebi Proposes SDI Rule Changes to Align with RBI Securitisation Framework

The Securities and Exchange Board of India (Sebi) on Monday proposed amendments to its norms governing securitised debt instruments (SDI Regulations), aiming to align them with the Reserve Bank of India’s 2021 guidelines on securitisation of standard assets. The move follows industry feedback pointing to inconsistencies between Sebi’s framework and RBI’s directions, particularly affecting transactions originated by RBI-regulated entities.

Among the key proposals, Sebi has suggested allowing single-asset securitisation for RBI-regulated entities by exempting them from the rule that no single obligor should account for more than 25% of the asset pool. The current restriction has limited the listing of such instruments, despite their acceptance under RBI norms. Sebi noted that this mismatch has hindered the growth of the listed securitisation market, especially for entities already under RBI’s prudential oversight.

Additionally, Sebi has proposed exempting RBI-regulated entities from restrictions on securitisation deals between an originator and a special purpose distinct entity (SPDE) within the same group, provided control conditions are met. On governance, it suggested limiting the originator’s representation on the SPDE board to one member without veto powers. The regulator also recommended revising rules on winding up securitisation schemes, allowing the appointment of a new trustee instead of mandating liquidation if a trustee’s registration is suspended or cancelled.

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