Document: Securities and Exchange Board of India (Issue and Listing of Securitised Debt Instruments and Security Receipts) (Amendment) Regulations, 2026
Notification No.: SEBI/LAD-NRO/GN/2026/304
Date: 1 July 2026
Effective Date: Date of publication in the Official Gazette (1 July 2026).
Executive Summary
The Securities and Exchange Board of India (SEBI) has notified the Securities and Exchange Board of India (Issue and Listing of Securitised Debt Instruments and Security Receipts) (Amendment) Regulations, 2026, introducing a series of governance, disclosure and investor protection measures relating to securitised debt instruments and security receipts.
The amendments primarily seek to:
- strengthen the independence of Special Purpose Distinct Entities (SPDEs);
- reduce conflicts of interest between originators, trustees and servicers;
- enhance investor protection;
- improve transparency in servicing and reporting;
- introduce additional risk management requirements; and
- provide greater regulatory flexibility in protecting investors.
Although many of the amendments appear textual, they significantly improve the governance architecture governing securitisation transactions.
Background
The principal regulations were originally notified in 2008 and have undergone periodic amendments to keep pace with developments in India's securitisation market.
The present amendment follows the 2025 amendments and reflects SEBI's continuing effort to align the regulatory framework with evolving market practices and prudential norms.
Detailed Analysis of Key Amendments
1. Restriction on Originator Representation in SPDE
A new proviso has been inserted in Regulation 9(9).
Where the originator is regulated by the Reserve Bank of India, it:
- cannot have more than one representative on the Board of the Special Purpose Distinct Entity; and
- such representative cannot possess veto powers.
Practical Significance
This amendment substantially strengthens the independence of the SPDE.
Since the SPDE is intended to function as a bankruptcy-remote vehicle, excessive control by the originator could undermine investor confidence. Limiting board representation and prohibiting veto rights ensures that securitised assets remain insulated from the originator's influence.
2. Restrictions on Acquisition of Assets
Regulation 10(3) has been substituted.
An SPDE is now prohibited from acquiring debt or receivables from an originator where the originator:
- belongs to the same group as the trustee; or
- is under common control with the trustee.
Practical Significance
This amendment addresses potential conflicts of interest.
If trustees and originators are related entities, independent oversight of investor interests could be compromised. The amendment therefore reinforces trustee independence.
3. Shift of Regulatory Responsibility from Originator to Servicer
One of the most notable amendments is the replacement of the term "originator" with "servicer" in several provisions.
This change affects Regulations 10A and 11 relating to:
- servicing obligations;
- submission of reports;
- auditor certifications; and
- ongoing disclosures.
Practical Significance
This amendment recognises commercial reality.
In modern securitisation transactions, post-transfer servicing is often undertaken by a specialised servicer rather than the originator. Accordingly, compliance obligations are now placed upon the entity actually responsible for managing and collecting the receivables.
This should improve accountability and reporting accuracy.
4. Periodic Performance Reporting
Trustees are now required to obtain periodic reports from the servicer, rather than the originator, regarding the performance of the underlying asset pool.
Similarly, audit reports and auditor certificates must also originate from the servicer wherever applicable.
Practical Significance
Investors receive information from the party that is directly managing recoveries and collections, thereby improving the quality and reliability of disclosures.
5. Relaxation under Regulation 19A
Regulation 19A has been amended by:
- removing the words relating to "track record";
- expanding the applicable clauses to include clause (a).
Practical Significance
This amendment appears intended to broaden the scope of the proviso and remove unnecessary drafting restrictions, thereby providing greater regulatory flexibility.
6. Additional Ground for Winding-up Schemes
Regulation 20 has been amended to permit winding up where:
"the Board so directs in the interest of investors."
Practical Significance
This significantly strengthens SEBI's supervisory powers.
Previously, winding-up was largely dependent upon events specified within the regulations or investor resolutions. SEBI now has express authority to intervene where investor interests so require.
7. Replacement of Trustee Instead of Automatic Winding-up
Regulation 45 has been substantially modified.
Instead of directing winding-up where a trustee's registration is suspended or cancelled, SEBI may now direct appointment of a new trustee. The accompanying Explanation has also been omitted.
Practical Significance
This is a highly pragmatic amendment.
Rather than disrupting an otherwise healthy securitisation structure due to trustee-related issues, continuity of the transaction can be maintained through trustee replacement.
This reduces market disruption while safeguarding investor interests.
8. Introduction of Concentration Risk Disclosure
Schedule V has been amended by introducing disclosure relating to:
"Concentration risk arising due to single asset securitisation."
Practical Significance
This is a major investor protection measure.
Where securitisation depends heavily upon a single underlying asset, the associated concentration risk becomes significant.
Mandatory disclosure enables investors to better assess:
- portfolio diversification;
- default risk;
- exposure concentration; and
- expected cash flow stability.
Overall Regulatory Impact
The amendments collectively demonstrate SEBI's emphasis on:
- stronger governance standards;
- clearer allocation of responsibilities;
- enhanced trustee independence;
- improved disclosure framework;
- better risk identification; and
- stronger investor protection mechanisms.
Rather than introducing sweeping structural reforms, the notification focuses on eliminating governance weaknesses that may arise during the life cycle of securitisation transactions.
Stakeholders Affected
The amendments are particularly relevant for:
- Originators (Banks, NBFCs and Financial Institutions)
- Servicers
- Trustees
- Special Purpose Distinct Entities (SPDEs)
- Credit Rating Agencies
- Stock Exchanges
- Investors in Securitised Debt Instruments
- Security Receipt Holders
Each stakeholder may need to review existing transaction documents and operational practices to ensure alignment with the amended regulatory requirements.
Compliance Considerations
Entities involved in securitisation transactions should consider:
- Reviewing board composition of SPDEs to ensure compliance with the new representation limits.
- Assessing trustee independence from originators.
- Updating servicing agreements to reflect the enhanced responsibilities of servicers.
- Revising disclosure and reporting frameworks.
- Incorporating concentration risk assessments into transaction documentation.
- Updating internal compliance manuals and standard operating procedures.
Conclusion
The SEBI (Issue and Listing of Securitised Debt Instruments and Security Receipts) (Amendment) Regulations, 2026 represent an incremental yet meaningful enhancement of India's securitisation regulatory framework. By reinforcing the independence of SPDEs, clarifying the role of servicers, strengthening trustee oversight, expanding SEBI's intervention powers, and mandating disclosure of concentration risk, the amendments are designed to improve transparency, reduce conflicts of interest, and enhance investor confidence in securitisation transactions. These changes are expected to contribute to a more robust and resilient securitisation market while aligning regulatory requirements with evolving market practices and prudent governance standards.
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