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SEBI Proposes New Disclosure Rules for Securitised Debt
- SEBI has proposed new disclosure rules for securitized debt instruments to enhance transparency and investor protection.
- Special purpose distinct entities and their trustees will need to provide detailed half-yearly disclosures on asset performance, structure, and credit quality.
- The disclosures must be submitted to SEBI and stock exchanges within 21 days from the end of March and September.
- Different disclosure requirements will apply based on the type of securitized assets, including loans, debt securities, or credit facilities.
- Trustees must disclose data on various aspects like asset maturity profiles, overdue exposures, prepayment rates, recovery actions, and more.
- Specific information is required on credit enhancements, liquidity support, and significant events impacting creditworthiness or receivables servicing.
- Trustees also need to report any post-securitization amendments to loan terms and provide updates on asset pool distribution.
- The proposed formats aim to facilitate automated supervision and processing of data to ensure greater market transparency and discipline.
- SEBI's initiative aligns with the Reserve Bank of India's revised securitization framework.
- SEBI is seeking public feedback on the draft circular regarding the periodic disclosure requirements for trustees until July 7.
- The proposed rules aim to modernize the securitization market to meet evolving regulatory standards.
- The consultation paper is based on a review by a SEBI working group aligning regulations with RBI guidelines on securitization.
- The move is part of SEBI's efforts to strengthen regulations and protect investor interests in securitized debt instruments.
- The objective is to enhance market integrity and ensure more effective monitoring and reporting within the securitization market.
- SEBI's call for public feedback demonstrates a collaborative approach to refining regulations in the financial sector.
- The proposed measures reflect a significant step towards increasing financial market transparency and accountability.
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