Sebi asks trustees to make periodic disclosures on securitised exposures

Capital markets regulator Sebi mandated detailed and periodic disclosures by trustees of special purpose distinct entities to enhance transparency in securitisation transactions, requiring reporting across multiple credit, recovery, and asset-pool parameters.

Under this, the regulator mandated half-yearly reporting by trustees of special purpose distinct entities across a wide range of credit, recovery, and structural parameters.

In its circular, Sebi said that trustees of special purpose distinct entities will have to submit these disclosures on a half-yearly basis to the regulator and to the stock exchanges where the SDIs are listed, within 30 days from the end of March or September.

The provisions of the circular will come into effect from March 31, 2026, it added. Under the disclosure, entities are required to disclose whether any top-up or additional loans have been extended after securitisation against the same security or to the same borrower, according to a circular issued by the regulator.

In addition, changes in credit quality must be reported, including any increase in the probability of default since the previous disclosure and the number of exposures impacted.

Trustees will also need to disclose the expected credit loss on underlying loans, debt securities or credit facilities, along with any change from earlier disclosures.