Sebi seeks to align securitisation framework with RBI regulations

Why in news

Sebi proposed aligning its securitisation framework with RBI regulations to allow the listing of single-asset securitisation deals.

Background

Sebi proposed a waiver of the 25% cap on single borrower exposure for RBI-regulated entities. The proposal includes shifting disclosure responsibility from originators to servicers and easing structural restrictions.

Facts for Prelims

• BodySebi: The primary regulator for securities markets in India
• FactProposed waiver of the 25% cap on single borrower exposure for RBI-regulated entities
• FactPublic comment period for the proposal ends on May 25th

For Mains

Q. Discuss how aligning securitisation frameworks between Sebi and RBI can enhance liquidity and risk management in the Indian financial markets.

Dimensions to cover in your answer

• Regulatory arbitrage: Mitigating risks arising from divergent oversight between securities and banking regulators
• Market liquidity: Enabling single-asset securitisation to broaden the pool of investable high-quality assets

Keywords: Securitisation · Regulatory Alignment · Liquidity Management · Risk Mitigation · Asset-backed Securities

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