SEBI WANTS MONTHLY INFO FOR SECURITIZED PAPER LISTING

LENDERS who sell their loans through the securitization route will now have to make monthly disclosures to stock exchange if they wish to list their securitized paper. SEBI announced a standard listing agreement with continuous disclosure requirements for securitized instruments. Securitization refers to the process where an entity gets money upfront by converting future cash inflows into marketable securities. The process enables the lenders to transfer their loan assets to a special purpose vehicle which will make regular payments to investors who put money upfront. Besides loan repayment, any form of receivables can be securitized. Instances of securitization in the past include toll collection and royalty payment due to artists. In India bulk of securitization deals relate to either mortgaged- backed securities or asset-backed securities.