Indian Securitisation Foundation (ISF) is a not-for-profit organisation incorporated under section 25 of the Companies Act, 1956, a representative body of the securitisation industry in India. ISF is formed with the objective of developing, promoting and protecting the securitisation, structured finance markets in India in particular, and market for fixed income securities in general.
Securitisation in India is not just a fixed income investing instrument, but essential for the idea of financial inclusion, in form of priority sector lending. Banks meet their priority sector targets partly through portfolio acquisitions and securitisation, thereby putting securitisation at par with the banking book.
Infrastructure sector also depends substantially on securitisation for equity extraction.
In essence, the significance of securitisation to India’s financial sector cannot be under-estimated.
Over time, credit default swaps are also expected to be prevalent as ways of synthetically replicating credit risk.
It is a clear policy choice to have a strong market for fixed income securities in India: structured finance securities are an essential part of that market, to provide variety, choice and alignment to investor needs.
In this background, ISF was conceptualised to provide direction, leadership, advocacy and support to the securitisation and structured finance industry.
Some of the functions of the Foundation include:
making representation to various authorities from time to time on matters as may concern securitisation and similar capital market instruments.
b. Industry forums and networking -
holding periodic conventions and educational courses.
c. Development of industry standards -
framing self-regulatory standards on disclosures, reporting, servicing reporting, DOs and DONTs for securitisation and direct assignment transactions, etc. Development of standards such as standard assignment agreements, assignment procedures, notification procedures, etc. on the lines of ISDA agreements and encouraging members over period to start using such standard templates.
d. Information exchange –
on matters of common interest, collateral performance, etc