SEBI has issued a Consultation paper on review of SEBI (Issue and Listing of Securitized Debt Instruments and Security Receipts) Regulations, 2008. The propositions from the consultation paper address several critical areas:
- Form of Issuance and Ticket Size: SDIs are proposed to be issued only in dematerialized (demat) form, with a minimum ticket size of ₹1 crore, ensuring that only financially capable entities participate in securitization.
- Structural Enhancements: The recommendations propose adjustments to the minimum risk retention (MRR) and minimum holding period (MHP) for various asset classes, along with the introduction of clean-up call options that provide the originator the right to repurchase a portion of the outstanding securitized assets.
- Trustee Requirements: Proposals include limiting trustees to SEBI-registered debenture trustees and specifying removal and replacement procedures. The working group has also recommended clarifying the duties and obligations of trustees to enhance accountability and transparency.
- Disclosure Requirements: Updated disclosure mandates include semi-annual reporting, with continuous rating updates for investors. These requirements aim to ensure that investors receive timely information on SDIs, thus facilitating informed decision-making.
- Clarificatory Changes and Legislative References: Proposed changes also include updating the definitions within the regulations, removing obsolete references to the Monopolies and Restrictive Trade Practices Act, 1969, and aligning them with the Companies Act, 2013 and Competition Act, 2002.
The comments/ suggestions should be submitted through online mode latest by November 16, 2024.
