Final Amendment Regulation — Issued by the Securities and Exchange Board of India (SEBI) on July 1, 2026. Effective immediately from the date of publication in the Official Gazette.
Quick Reference Box
SEBI Securitised Debt Instruments Regulations — Background and Context
On July 1, 2026, the Securities and Exchange Board of India notified the SEBI (Issue and Listing of Securitised Debt Instruments and Security Receipts) (Amendment) Regulations, 2026, further amending the SEBI (Issue and Listing of Securitised Debt Instruments and Security Receipts) Regulations, 2008. The 2008 framework governs how special purpose distinct entities (SPDEs) issue and list securitised debt instruments (SDIs) and security receipts, and how trustees, originators, and now "servicers" are held accountable within that structure.
The 2008 Regulations have been amended repeatedly to keep pace with market practice, most recently on May 5, 2025 via Notification No. SEBI/LAD-NRO/GN/2025/247. This 2026 amendment continues that process, focusing on three practical concerns: (a) conflicts of interest where an RBI-regulated originator also sits on the trustee board of the SPDE it originates assets into; (b) precise terminology — distinguishing the entity that originates an asset pool from the entity that services it on an ongoing basis; and (c) giving SEBI clearer, investor-protective grounds to intervene in scheme winding-up and trustee continuity.
For compliance officers and company secretaries working with SEBI SDI Regulations 2026, the amendment is not cosmetic — it changes who signs off on performance reports, who can sit on an SPDE trustee board, and what disclosures investors must see in Schedule V risk factors.
Regulation 9(9) — RBI-Regulated Originators and SPDE Trustee Board Composition
Regulation 9(9) of the 2008 Regulations already restricted how many trustees on an SPDE's board could be nominees of, or connected to, the sponsor or originator. The 2026 amendment adds a targeted proviso for a specific category of originator.
⚠️ New Restriction — RBI-Regulated Originators
Where the originator is an entity regulated by the Reserve Bank of India, it may place no more than one representative on the SPDE's trustee board, and that representative shall not have veto power.
This is a direct governance safeguard: it prevents an RBI-regulated originator (typically a bank or NBFC that has sold assets into the securitisation structure) from exercising outsized or blocking control over the very trustee board meant to oversee the SPDE independently.
Regulation 10(3) — Restriction on Acquiring Debt from Group-Linked Originators
Regulation 10(3) has been substituted in full. The revised provision reads as a clean prohibition rather than a qualified condition.
❌ Prohibited — Acquisition from Group/Common-Control Originators
No special purpose distinct entity (SPDE) shall acquire any debt or receivables from any originator that is (a) part of the same group as the trustee, or (b) under the same control as the trustee.
This closes a structural conflict-of-interest gap: a trustee is meant to supervise the SPDE independently of the originator, and that independence is undermined if the trustee and originator share common ownership or control.
"Originator" Replaced With "Servicer" — Regulations 10A, 11(3) and 45(2)
The most pervasive change across this amendment is terminological: several provisions that previously referred to the "originator" for ongoing reporting, audit, and record-keeping duties now refer to the "servicer" instead. This reflects a practical distinction — the originator creates the underlying asset pool, but the servicer is the entity that actually administers collections and performance reporting after issuance.
📝 Definitional Shift — Servicer Replaces Originator
Regulation 10A(1) & 10A(2): "originator" replaced with "servicer"; the words "as made by the originator" omitted.
Regulation 11(3)(h): "originator" replaced with "servicer" for reporting on underlying asset pool performance.
Regulation 11(3)(j): auditor references to "originator" replaced with "servicer"; "as made by the originator" omitted.
Regulation 11(3)(k): both occurrences of "originator" replaced with "servicer."
In practical terms, under the amended Regulation 11(3), the trustee must now obtain periodic performance reports on the underlying asset pool from the servicer (at least once every quarter), and must share the servicer's auditor reports and audit certificates with the credit rating agency rating the SDI — not the originator's.
Regulation 19A — Streamlining the First Proviso
The first proviso to Regulation 19A is tightened by removing a qualifying phrase and correcting a cross-reference.
- The words "of the track record," are omitted from the proviso.
- The reference is corrected to include clause (a) alongside clauses (d) and (e), so the proviso now reads as conditions specified in clauses (a), (d) and (e).
Regulation 20 — New Ground for Winding Up a Scheme
Regulation 20 lists the circumstances in which a scheme of an SPDE may be wound up. The amendment adds a new, investor-protective trigger to that list.
⚠️ New Winding-Up Ground — Board Direction
Clause (c)'s closing punctuation is changed to "; and", and a new clause (d) is inserted: "if the Board so directs in the interest of the investors."
This gives SEBI a direct, discretionary power to require winding up of a scheme purely on investor-protection grounds, independent of the pre-existing triggers (such as investor special resolution under Regulation 34).
Regulation 45(2) — Trustee Replacement Instead of Scheme Winding-Up
Regulation 45(2) previously empowered SEBI, when suspending or cancelling a trustee's registration, to also direct winding up of the SPDE's schemes within a specified period. The amendment replaces that remedy with a less disruptive one.
✅ Permitted — Appointment of a New Trustee
When passing an order suspending or cancelling a trustee's registration, the Board may now direct, within a specified period and manner, the appointment of a new trustee in place of the trustee whose registration is suspended or cancelled — instead of directing winding up of the SPDE's schemes. The accompanying Explanation is omitted.
This is investor-friendly: it preserves the SPDE's schemes and underlying investor holdings by substituting the trustee, rather than forcing an unwind purely because of a trustee-level regulatory action.
Schedule V, Clause 5.0 — New Concentration Risk Disclosure
Schedule V of the 2008 Regulations lists risk factors that must be disclosed in offer documents for securitised debt instruments. The amendment adds a new, specific risk factor.
📝 New Disclosure — Concentration Risk
Existing sub-clause (l) of clause 5.0 is renumbered as sub-clause (m). A new sub-clause (l) is inserted: "Concentration risk arising due to single asset securitisation."
Issuers of SDIs backed by a single underlying asset must now explicitly flag this concentration risk to investors as a distinct disclosure item, rather than folding it into general risk language.
SEBI Securitised Debt Instruments 2026 — Key Changes at a Glance
Compliance Checklist for SPDEs, Trustees and Servicers
☑ Review SPDE trustee board composition — confirm any RBI-regulated originator has no more than one representative and that representative holds no veto power.
☑ Audit existing/proposed debt acquisitions to confirm no SPDE is acquiring receivables from an originator under the same group or control as its trustee.
☑ Update internal reporting templates and service-level agreements to reflect the "servicer" (not "originator") as the party responsible for quarterly performance reporting under Regulation 11(3).
☑ Ensure the servicer's auditor reports and audit certificates — not the originator's — are shared with the credit rating agency rating the SDI.
☑ Revisit offer documents and Schedule V risk-factor disclosures to include the new concentration risk clause for single-asset securitisations.
☑ Update internal SOPs for trustee registration suspension/cancellation scenarios to reflect the new trustee replacement remedy under Regulation 45(2), instead of assuming scheme winding-up.
☑ Flag the new Regulation 20(d) ground — a Board direction "in the interest of investors" — in scheme governance documents as an independent winding-up trigger.
CorpLawUpdates Analysis
The most consequential change in this amendment is the systematic replacement of "originator" with "servicer" across the reporting and audit provisions of the SEBI SDI Regulations, 2026. In many Indian securitisation structures, the originator and servicer are the same entity at issuance but can diverge over the life of the transaction — particularly where servicing rights are transferred or sub-serviced. By anchoring reporting and audit obligations to the servicer rather than the originator, SEBI is aligning the regulation with operational reality: it is the servicer, not the originator, who has live visibility into collections and asset-pool performance.
The Regulation 9(9) proviso and the new Regulation 10(3) prohibition together form a coherent independence package aimed squarely at bank- and NBFC-originated securitisations. RBI-regulated originators are frequently the largest and most influential parties in Indian securitisation deals, and a single non-veto trustee seat meaningfully limits their ability to steer trustee decision-making — a governance concern that has surfaced repeatedly in structured finance discussions.
The likely compliance challenge for practitioners will be operational rather than legal: existing servicing agreements, trust deeds, and offer document templates that use "originator" throughout will need to be revisited to correctly allocate the reporting and audit obligations to the servicer, especially in transactions where the two roles are performed by different entities. Firms should also review board nomination letters for SPDEs where an RBI-regulated bank or NBFC is the originator.
Looking ahead, the softened Regulation 45(2) remedy — trustee replacement instead of automatic scheme winding-up — signals a broader regulatory preference for continuity over disruption when trustee-level issues arise, which practitioners should watch for in future SEBI amendments to other trustee-governed structures such as REITs and InvITs.
Source: Gazette of India, Extraordinary, Part III—Section 4, No. 422, dated July 1, 2026. SEBI (Issue and Listing of Securitised Debt Instruments and Security Receipts) (Amendment) Regulations, 2026 — Notification No. SEBI/LAD-NRO/GN/2026/304, signed by Amit Pradhan, Executive Director, SEBI. Official PDF as supplied by user — link to be added by editor before publishing.
This article is for informational and educational purposes only and does not constitute legal or regulatory advice. Verify with primary regulatory sources before acting.
