Description

SEBI mandates half-yearly disclosures by trustees of special purpose distinct entities for SDIs listed on stock exchanges, effective March 31, 2026.

Summary

SEBI has mandated periodic disclosure requirements for Securitised Debt Instruments (SDIs) under Regulation 11B of the SDI Regulations, 2008. Trustees of special purpose distinct entities must submit half-yearly disclosures to SEBI and stock exchanges within 30 days from the end of March or September. The circular provides detailed formats for disclosures based on underlying asset types (loans, listed debt securities, credit facility exposures, or other exposures) and becomes effective from March 31, 2026.

Key Points

  • Half-yearly disclosure requirement for trustees of special purpose distinct entities
  • Submissions due within 30 days from end of March or September
  • Two disclosure formats: Annexure I for SDIs backed by loans/listed debt securities/credit facilities, Annexure II for other exposures
  • Disclosures include maturity characteristics, Minimum Retention Requirement (MRR), credit quality of underlying assets
  • Weighted average maturity, rating of pool, and average default rate calculations required
  • Illustrations provided in Annexure III for key metrics

Regulatory Changes

This circular operationalizes Regulation 11B of SEBI (Issue and Listing of Securitised Debt Instruments and Security Receipts) Regulations, 2008 (last amended May 05, 2025). The regulation previously required information submission to SEBI on a half-yearly basis but lacked prescribed format and timeline. This circular now specifies:

  • Standardized disclosure formats (Annexure I and II)
  • Clear 30-day submission deadline from period end
  • Dual submission to SEBI and listing stock exchange
  • Detailed parameters including maturity distribution, MRR compliance, credit quality metrics

Compliance Requirements

Applicable to: Trustees of special purpose distinct entities issuing SDIs and recognized stock exchanges

Disclosure Timeline: Within 30 days from end of March or September (half-yearly)

Submission Destinations: SEBI and the stock exchange where SDIs are listed

Required Disclosures (Annexure I - Loan/Debt/Credit Facility Backed SDIs):

  • Weighted average maturity of underlying assets
  • Maturity-wise distribution (within 1 year, 1-3 years, 3-5 years, after 5 years)
  • MRR as percentage of book value and actual retention percentage
  • Types of retained exposure (credit enhancement, senior tranches investment, liquidity support)
  • Distribution of overdue exposures post-securitization

Required Disclosures (Annexure II): Specific format for SDIs backed by other exposures

Calculation Methodology: Annexure III provides illustrations for weighted average maturity, weighted average rating of pool, and average default rate

Important Dates

  • Circular Issue Date: December 16, 2025
  • Effective Date: March 31, 2026
  • First Disclosure Due: Within 30 days from end of September 2026 (by October 30, 2026)
  • Subsequent Disclosures: Half-yearly - by April 30 and October 30 each year

Impact Assessment

Market Impact: Enhanced transparency in the SDI market will improve investor confidence and information symmetry. The standardized disclosure framework enables better assessment of securitization quality and risk retention by originators.

Operational Impact: Trustees and special purpose distinct entities must establish systems for data collection, calculation of metrics (weighted averages, MRR compliance, credit quality), and timely reporting. The 30-day window requires operational readiness for half-yearly data compilation.

Compliance Burden: Moderate - affects specialized market participants (trustees, SPEs) dealing with SDIs. One-time system setup required with recurring half-yearly reporting obligation. Clear format and calculation methodology reduces ambiguity.

Investor Benefit: Investors in SDIs gain periodic visibility into underlying asset quality, maturity profiles, and originator skin-in-the-game through MRR disclosures, enabling better informed investment decisions.

Regulatory Alignment: Strengthens SEBI’s oversight of securitization market and aligns with global best practices for structured finance product transparency.

Impact Justification

New periodic disclosure framework for SDI market participants enhancing transparency. Affects trustees and special purpose entities with 30-day reporting timeline. Moderate compliance burden with clear implementation deadline of March 31, 2026.