The Securities and Exchange Board of India (SEBI) has announced a series of proposed amendments to its regulations governing securitised debt, aimed at enhancing alignment with the Reserve Bank of India’s (RBI) 2021 framework for securitisation of standard assets, specifically for transactions conducted by RBI-regulated entities.
One of the key proposals includes allowing single-asset securitisation for RBI-regulated entities by exempting them from the existing cap of 25 percent of the asset pool for a single obligor. This cap restricts the listing of Securitised Debt Instruments (SDIs) when the underlying comprises only a single asset, despite such transactions being allowed under the current RBI framework.
Additionally, SEBI is looking to remove restrictions that prevent securitisation transactions between entities within the same corporate group, provided that the originator is regulated by the RBI. The RBI framework does not include such prohibitions but does require that the originator refrains from exercising control over the Special Purpose Distinct Entities (SPDE) or the trustee.
Regarding governance norms for SPDEs where the originator is RBI-regulated, SEBI has recommended limiting the representation on the SPDE board to a single member without veto power, in accordance with RBI guidelines. “SEBI has received feedback that the aforementioned regulation diverges from the RBI’s existing guidelines, which stipulate that the originator should not have more than one representative on the Board of the SPDE who should be without veto power, as this could potentially dilute the arms’ length principle for transactions between the originator and the SPDE,” the draft paper noted. SEBI is inviting public comments on this proposal until May 25.
In terms of winding up securitisation transactions, SEBI has suggested changing the requirement of liquidating schemes to appointing a new trustee in the event of suspension or cancellation, aligning this with RBI norms.
The proposals are part of SEBI’s ongoing efforts to enhance the regulatory framework surrounding securitisation transactions, facilitating greater flexibility and operational efficiency in the market.
Published on May 4, 2026.
