SEBI Introduces ₹1 Crore Minimum, Mandates Demat for Securitised Debt Instruments

The Securities and Exchange Board of India (SEBI) has introduced a set of regulations for securitised debt instruments (SDIs), setting a minimum investment threshold and requiring dematerialised (demat) format for all issuances and transfers. The rules were announced through a gazette notification.

₹1 Crore Minimum Investment Mandated

A minimum ticket size of ₹1 crore has been mandated for the issuance of SDIs. The same ₹1 crore threshold will apply to any subsequent transfers involving originators not regulated by the Reserve Bank of India (RBI). For SDIs backed by listed securities, the minimum investment will be equal to the highest face value among the underlying securities.

Demat Format Now Compulsory

SEBI has made it mandatory for all securitised debt instruments to be issued and transferred only in demat form. This applies across the board, irrespective of the nature of the originator.

Public Offer Window and Advertisement Norms

Public offers of SDIs must remain open for a minimum of three days and a maximum of ten days. The advertisement requirements for these issues will follow SEBI’s existing norms for non-convertible securities.

Minimum Track Record for Originators

Entities looking to issue SDIs must have a minimum operational track record of three years. This applies to both regulated and unregulated originators.

Risk Retention and Holding Period Conditions

Originators will be required to retain at least 10% of the securitised pool, or 5% in the case of receivables with a maturity of up to 24 months. Loans with a tenor of up to two years must be held for a minimum of three months, while those with longer tenors must be held for at least six months before securitisation.

Read More: SEBI Allows Investment Advisers to Advertise Verified Performance Metrics!

Clean-Up Call and Asset Scope Clarified

An optional clean-up call has been introduced, allowing originators to repurchase up to 10% of the original pool value. SEBI has also updated the definition of eligible underlying assets, limiting them to listed debt securities, accepted trade receivables, rental income, and equipment leases. Re-securitisation and synthetic securitisation are not allowed.

Conclusion 

SEBI has amended the relevant rules to enforce these changes. By tightening rules around minimum investment size, eligibility, and permissible assets, SEBI aims to boost transparency, reduce risk, and improve investor confidence in the securitisation market.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

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