SEBI amends LODR in relation to listing of Security Receipts

By CS Vinita Nair (

Aligns with recent amendment made in SEBI regulations for listing of Securitised Debt Instruments

SEBI has notified amendments to LODR Regulations vide SEBI (Listing obligations and Disclosure Requirements) (Fifth Amendment) Regulations, 2018[1] (‘Present Amendment’) dated September 6, 2018 and has aligned the said regulations with the amendments made in SEBI (Public Offer and Listing of Securitised Debt Instruments) (Amendment) Regulations, 2018 dated June 26, 2018[2].

Brief background

Initially, SEBI (Issue and Listing of Securitised Debt Instruments) Regulations, 2008[1]  (‘SDI Regulations) was applicable to:

(a)public offers of securitised debt instruments;

(b)to listing of securitised debt instruments issued to public or any person(s), on a recognised stock exchange.

‘Securitised debt instruments’ has been defined to mean any  certificate  or  instrument  (by  whatever  name  called),  issued  to an  investor  by  any  issuer  being  a  special  purpose  distinct  entity which  possesses  any  debt  or  receivable,  including  mortgage  debt, assigned  to  such  entity,  and  acknowledging  beneficial  interest  of such investor in such debt or receivable, including mortgage debt, as the case may be.

In Budget Speech 2017-18[2], the Finance Minister announced appropriate changes to permit listing and trading of Security Receipts (SRs)[3]. Mr. Vinod Kothari was also a part of the sub-group of SEBI and was the anchor person who prepared and presented the report to SEBI[4].

Accordingly, it was proposed to amend SDI Regulations to insert Chapter VIIA dealing with issuance and listing of SRs , by way of SEBI (Public Offer and Listing of Securitised Debt Instruments) (Amendment) Regulations, 2018. However, corresponding amendment to LODR Regulations was pending to be carried out.

Present Amendment

The Present Amendment incorporates listing of SRs in following manner:

  • Definition of designated securities has been amended to include security receipts;
  • Definition of ‘securtised debt instruments’ has been cross referred to SDI Regulations and definition of ‘security receipts’ has been inserted with corresponding reference to SDI Regulations;
  • 3 dealing with applicability of the regulations has been amended to incorporate ‘ security receipts’;
  • Chapter VIII A inserted specifying the obligations of the listed entity which has listed its SRs.

Compliance Requirements

  • Disclosure of material information ( 87B read with Part E of Schedule III) – Event based compliance;
    • To be disclosed as soon as reasonable possible but not later than 24 hours from occurrence of event/ information.
    • Disclosure of said material information on its website or on the website of sponsor[5], which shall be hosted on the website for minimum period of 5 years and thereafter as per the archival policy of the listed entity.
  • Valuation of the SRs ( 87C) – Quarterly compliance
    • Mandatorily to be done at the end of each quarter, by an independent valuer.
    • NAV to be calculated and the same to be declared by the asset reconstruction company within 15 days from end of quarter.
  • Credit rating of SRs on half yearly basis and declaration of NAV as per RBI requirement. [Sub-regulation (2) of Reg. 87B]
  • Intimation of Record Date ( 87E )
    • notice in advance of at least seven working days (excluding the date of intimation and the record date) to the stock exchange(s) of the record date.

Material Events in case of SRs (Part E of Schedule III)

  • Related to cash flows;
    • Delay / expected delay in cash-flows;
    • Change in value of cash-flows;
    • Receipt of cash-flow/ expected cash-flow along with quantum so received;
    • proposal or action for forfeiture of unclaimed cash flow.
  • Change in Credit enhancement measures;
  • Credit Rating;
    • Periodic rating obtained/ revision in rating.
    • Proposal to change/ change of CRA.
  • NAV
    • Periodic NAV;
    • Proposal to change/ change of valuer.
  • Underlying Assets
    • Change in profile of assets by way of accretion to or realisation of assets from the existing pool;
    • Proposal for acquisition of assets.
    • Expected non-realisation/ non-realisation of the financial assets and remedial measures proposed to be undertaken;
    • Change in the nature of charge on the underlying assets;
    • initiation or status update with respect to reference to National Company Law Tribunal under the Insolvency and Bankruptcy Code 2016.
  • Relating to terms attached to SRs
    • Proposal to change/ change in terms of SRs ( rights, privileges, nature or form);
    • Proposal or action with respect to exercising call/put option (right to redeem) or any similar option
    • Breach of covenants under the terms of SRs;
    • proposal or action for forfeiture of SRs.
  • Change in resolution plan formulated by ARC;
  • Change in holding of non-performing loans across other banks;
  • Relating to listed entity and Sponsor
    • change in the general character or nature of business / activities, disruption of operation due to natural calamity etc.;
    • any attachment or prohibitory orders restraining the listed entity from transferring SRs;
    • fraud or default by sponsor or KMPs or arrest of sponsor or KMPs.
    • Change in directors, KMPs, auditor and Compliance officer of the sponsor.
  • Board meeting of listed entity
    • Intimation in advance of the BM at which the recommendation or declaration of issue of SRs or any other matter affecting the rights or interests of holders of SRs is proposed to be considered and also outcome of such meetings;
  • All disclosures required to be made as per RBI requirements[6];
  • Any other material disclosures not provided above.



[3] SRs, has been defined in SARFAESI Act, 2002 to mean a receipt or other security, issued by a securitisation company or reconstruction company to any qualified institutional buyer pursuant to a scheme, evidencing the purchase or acquisition by the holder thereof, of an undivided right, title or interest in the financial asset involved in securitization.

[4] (Refer page 12 for Composition of sub-committee)

[5] “(v) “sponsor” means –

(i) any person who establishes or promotes a special purpose distinct entity for the purposes of issuance of Securitised debt instrument; or

(ii) an asset reconstruction company who has established/promoted a trust which has issued security receipts;”



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