LODR Regulations, 2025 (Second Amendment): SEBI Enhances Disclosure Norms for Securitised Debt Instruments [Read Notification]

The Securities and Exchange Board of India (SEBI) issued Notification No. SEBI/LAD-NRO/GN/2025/244 dated April 29, 2025, announcing the Second Amendment to the Listing Obligations and Disclosure Requirements (LODR) Regulations, 2025. This amendment strengthens the disclosure framework applicable to securitised debt instruments (SDIs) and related entities.

SEBI revised key provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, specifically focusing on trustee-level accountability and annual transparency reporting for securitised instruments.

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Key Amendments Explained

1. Centralised SCORES Registration for Trustees

A new proviso added to Regulation 13(2) allows:

Trustees of securitised debt instruments to obtain a single SCORES registration for all Special Purpose Distinct Entities (SPD entities) they manage.

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This simplifies the grievance redressal process under SEBI’s SCORES platform by reducing redundant registrations for each SPDE individually.

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2. Mandatory Annual Disclosures by SPD Entities or Trustees

Under Schedule III, Part D, two critical disclosure clauses have been introduced:

Clause 10: Litigation & Material Events

SPD entities or their trustees must now disclose, annually, to the stock exchange:

• Any ongoing litigations, and
• Material developments involving the originator, servicer, or any other counterparty to the securitisation deal,
   if these could affect investor interests.

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Clause 11: Defaults in Servicing

If the servicer defaults on its obligations under the transaction structure, the SPD entity or trustee must:

• Report such defaults annually to the stock exchange.

These disclosures aim to keep investors updated on risks that may affect repayment timelines, asset quality, or transaction performance.

Effective Date

The amended regulations came into force on the date of their publication in the Official Gazette, i.e., April 29, 2025

Impact on Market Participants

• Trustees: Must review and update internal processes to ensure timely, accurate annual disclosures on litigation and servicing status.
• Originators & Servicers: Will be under greater scrutiny and must maintain transparency with trustees and regulators.
• Investors: Can expect improved visibility into transaction health and counterparty risk in SDIs.

To Read the full text of the Order CLICK HERE

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