Description

SEBI mandates half-yearly disclosures by trustees of special purpose distinct entities for SDIs, effective March 31, 2026, to enhance transparency in securitised debt markets.

Summary

SEBI has issued Circular HO/17/11/18(1)2025-DDHS-POD1/I/342/2025 dated December 16, 2025, mandating periodic disclosure requirements for Securitised Debt Instruments (SDIs). Under Regulation 11B of SEBI (Issue and Listing of Securitised Debt Instruments and Security Receipts) Regulations, 2008, trustees of special purpose distinct entities must now submit comprehensive half-yearly disclosures to SEBI and stock exchanges within 30 days from the end of March or September. The circular provides detailed disclosure formats for SDIs backed by different types of exposures and becomes effective from March 31, 2026.

Key Points

  • Trustees must submit half-yearly disclosures within 30 days from end of March or September
  • Two separate disclosure formats: Annexure I for SDIs backed by loan/listed debt securities/credit facility exposures, and Annexure II for SDIs backed by other exposures
  • Disclosures to be submitted to both SEBI and the stock exchange where SDIs are listed
  • Annexure III provides illustrations for calculating weighted average maturity, weighted average rating, and average default rate
  • Circular issued under Section 11(1) of SEBI Act, 1992 read with Regulations 11B and 48 of SDI Regulations
  • Applies to all special purpose distinct entities and their trustees

Regulatory Changes

SEBI has operationalized the existing Regulation 11B of the SDI Regulations (last amended May 05, 2025) by specifying the exact manner and format of information submission. Previously, the regulation mandated disclosures but did not specify the detailed format. This circular now prescribes comprehensive disclosure templates covering:

  • Maturity characteristics of underlying assets (weighted average maturity and maturity-wise distribution)
  • Minimum Retention Requirement (MRR) details including actual retention percentages and types of retained exposures
  • Credit quality of underlying exposures including distribution of overdue loans and default rates
  • Asset pool composition and performance metrics

Compliance Requirements

For Trustees of Special Purpose Distinct Entities:

  1. Submit disclosures half-yearly (after March 31 and September 30) within 30 days of period end
  2. File disclosures with SEBI and the stock exchange where SDIs are listed
  3. Use Annexure I format for SDIs backed by loan/listed debt securities/credit facility exposures
  4. Use Annexure II format for SDIs backed by other exposures
  5. Calculate and report weighted average maturity of underlying assets
  6. Provide maturity-wise distribution of assets (within 1 year, 1-3 years, 3-5 years, and after 5 years)
  7. Disclose MRR as percentage of book value and actual retention percentage
  8. Detail types of retained exposure (credit enhancement, senior tranche investment, liquidity support, etc.)
  9. Report credit quality metrics including overdue loan distribution and default rates

For Stock Exchanges:

Receive and process half-yearly disclosures from trustees

Important Dates

  • December 16, 2025: Circular issued
  • March 31, 2026: Provisions become effective
  • First reporting deadline: April 30, 2026 (30 days after March 31, 2026)
  • Ongoing: Half-yearly submissions required within 30 days from end of March and September each year

Impact Assessment

Market Impact:

  • Enhanced transparency in the securitised debt market through standardized disclosure requirements
  • Improved information availability for investors in SDIs to assess credit quality and asset performance
  • Greater regulatory oversight of special purpose distinct entities and securitisation structures

Operational Impact:

  • Trustees must establish systems and processes to collect, calculate, and report detailed metrics on half-yearly basis
  • Additional compliance burden on special purpose distinct entities to provide data to trustees
  • Need for implementation of MRR tracking systems and credit quality monitoring mechanisms
  • Stock exchanges must develop infrastructure to receive and disseminate these periodic disclosures

Compliance Impact:

  • High compliance significance as mandatory requirement under SEBI regulations
  • Requires detailed record-keeping on asset maturity profiles, retention requirements, and credit quality metrics
  • First compliance deadline approximately 3.5 months away (April 30, 2026), requiring immediate preparation
  • Ongoing compliance obligation creating permanent operational requirements for all SDI market participants

Impact Justification

Introduces new mandatory half-yearly disclosure framework for all SDI trustees, significantly impacting compliance processes for securitised debt market participants with specific reporting deadlines starting March 2026.