What changed
RBI issued guidelines requiring all registered Securitisation Companies/Reconstruction Companies to declare the Net Asset Value of Security Receipts at periodic intervals. This is a new disclosure requirement aimed at informing Qualified Institutional Buyers about their investment value.
What it means for you
Banks and lenders investing in Security Receipts will now receive regular NAV updates, improving transparency and risk assessment. SC/RCs must implement systems to calculate and disclose NAV periodically, increasing operational compliance.
What you must do
- Ensure your SC/RC registers with RBI under SARFAESI Act if not already done.
- Set up processes to calculate and declare NAV of Security Receipts at periodic intervals.
- Communicate NAV disclosures to all Qualified Institutional Buyers as per guidelines.
- Review compliance with the new guidelines effective immediately from May 28, 2007.
Who it affects
All registered Securitisation Companies, All registered Reconstruction Companies, Qualified Institutional Buyers investing in Security Receipts
What is the purpose of this NAV disclosure requirement?
To enable Qualified Institutional Buyers to know the value of their investment in Security Receipts issued by SC/RCs.
When do these guidelines come into effect?
These guidelines come into force with immediate effect from May 28, 2007.
Who is required to comply with these guidelines?
All Securitisation Companies and Reconstruction Companies registered with RBI under the SARFAESI Act, 2002.