Market regulator Securities and Exchange Board of India is expected to soon allow trading of securitised debt instruments or certificates on stock exchanges, a move that will give a boost to the country's debt market.
The issue of allowing trading of securitised debt instruments on exchanges is likely to be taken up by the Sebi board in its next meeting scheduled to be held later this month, official sources said.
Securitisation is a form of financial instrument involving pooling of financial assets and the issuance of securities that are re-paid from the cash flows generated by the assets.
Common assets for securitisation include credit cards, mortgages, auto and consumer loans, student loans, corporate debt, export receivable and offshore
remittances.
The Sebi Board will also take up the issue of fine-tuning the guidelines for delisting companies from bourses, apart from preparing rules for investment advisors, sources said.
Currently, trading in certificates or instruments related to securitisation transactions cannot take place at stock exchanges, as they are not covered under the definition of 'securities' in Securities Contracts (Regulation) Act, 1956.
The Securities Contracts (Regulation) Amendment Bill 2007 was passed by Parliament last month.
Sources said finance ministry is in favour of disclosure based regulations for trading of securitisation instruments as against approval-based approach, and has asked SEBI to finalise guidelines at the earliest to give a filip to the debt market.