MRR vs MHP: the two securitisation skin rules
Minimum retention requirement vs minimum holding period is a comparison of the two rules that keep an originator attached to a pool it has sold. They are constantly confused because both are described as skin in the game, both were inserted into the SEBI (Issue and Listing of Securitised Debt Instruments and Security Receipts) Regulations, 2008 by the same amendment notified on 5 May 2025, and both appear in the same half-yearly filing. They measure completely different things. One is a percentage, the other is a duration. This comparison separates them. It is not investment advice.
Definition
MRR and MHP
are the two originator obligations in Indian securitisation. The minimum retention requirement is how much of the pool the originator must keep, 10 percent of book value or 5 percent in defined cases. The minimum holding period is how long it must have held the loans before assigning them, three or six months by tenor. Source: SEBI SDI Regulations, 2008.
MRR vs MHP, side by side
| Minimum retention requirement | Minimum holding period | |
|---|---|---|
| Regulation | 30B | 30C |
| What it measures | A share of the pool | A stretch of time |
| Unit | Percentage of book value | Months |
| Level | 10 percent, or 5 percent where any cash flow matures within 24 months, or 5 percent for RMBS | 3 months for loans of tenor up to 2 years, 6 months beyond |
| When it is tested | Continuously, over the life of the deal | Once, before assignment to the trust |
| Measured against | Unamortised principal, on an ongoing basis | The clock from CERSAI registration, with four alternative start dates |
| What it prevents | Selling a pool and keeping none of the loss | Selling a loan before it has had to perform |
| Disclosed as | Required percentage, actual percentage, composition of retained exposure | Required period, weighted average holding period, minimum and maximum |
| Who must ensure it | The special purpose distinct entity | The special purpose distinct entity |
10% and 3 months
Baseline minimum retention requirement and minimum holding period for a short-tenor loan pool
Source: SEBI SDI Regulations, 2008, Regulations 30B and 30C (inserted 5 May 2025)
The clearest way to keep them apart
Ask what a breach would look like.
A retention breach is an originator that securitised a pool and then quietly reduced its own exposure, by hedging the credit risk, selling the retained interest, encumbering it, or moving it to a group company. Regulation 30B(5) bars all four, fixes the form of retention for the life of the deal, and requires the level to be maintained as a percentage of unamortised principal, except where it falls through repayment or through the absorption of losses.
A holding period breach is an originator that wrote a loan and assigned it too soon, before anyone could see whether the borrower pays. Regulation 30C sets three months for loans with tenor up to two years and six months beyond that, counted from registration of the security interest with CERSAI, with separate start dates where no security exists, for project loans, for real estate mortgages, and for loans the originator itself acquired from another entity.
One is about how much stays behind. The other is about how long it stayed before it left. Full detail on each is in what is the minimum retention requirement and what is the minimum holding period.
Why the pairing works
The two rules cover each other's blind spot.
Retention alone would let a lender originate carelessly, keep 10 percent of a bad pool, and treat that loss as a cost of doing volume. Seasoning alone would let a lender hold loans for six months, sell 100 percent of them, and have no stake in what happens in year two.
Together they say: you must have carried the loan through its most fragile months, and you must keep carrying part of it for the rest of its life. Neither is a statement about how the pool will perform. Both are structural constraints on the person who chose the borrowers.
They also sit alongside the pool-level conditions in Regulation 19A, which bar any obligor from exceeding 25 percent of the pool at issuance, require the pool to be homogeneous, require the instruments to be fully paid up upfront, and require a three-financial-year track record from originator and obligor unless the originator is regulated by the RBI. The full picture is in what is a securitised debt instrument.
How they read differently in a filing
Both appear in the prescribed half-yearly disclosure SEBI specified on 16 December 2025, effective 31 March 2026, but they behave differently as data.
The retention head gives you two numbers on the same base, the required percentage and the actual, so the comparison is inside the filing. Track it across filings and you are watching a live level move.
The holding period head is historical. The weighted average holding period is measured at the time of securitisation, so it does not change from one filing to the next for a given pool. Its value is in what it says about the pool's construction: a pool where every loan sat exactly at the floor is a different pool from one full of long-seasoned loans, and only the weighted average and the minimum-to-maximum range distinguish them. Both pass.
One further wrinkle worth carrying: the required-MHP line cites RBI guidelines in the format for loan-backed pools and SEBI guidelines in the format for other exposures. Two rulebooks, one field name, as covered in SDI Annexure I vs Annexure II. The field-by-field walkthrough of both heads is in how to read an SDI disclosure.
Percentage and duration, ongoing and one-off, live and historical. Flock reports public regulatory filings with each claim sourced and dated, and takes no view on any instrument.
Frequently asked questions
What is the difference between MRR and MHP?
MRR is a quantity: the share of the securitised pool the originator must keep, 10 percent of book value or 5 percent in defined cases. MHP is a duration: how long the originator must have held the loans before assigning them, three or six months by tenor. Source: SEBI SDI Regulations, 2008, Regulations 30B and 30C.
Does MRR apply after issuance and MHP before?
Yes. The minimum holding period is a precondition tested before assignment to the trust, so it is satisfied once and then fixed. The minimum retention requirement runs for the life of the deal, measured as a percentage of unamortised principal on an ongoing basis. Source: SEBI SDI Regulations, 2008.
Are both reported in the half-yearly SDI disclosure?
Yes, in separate heads. The retention head carries required MRR, actual retention and the composition of the retained exposure. The holding-period head carries the MHP required, the weighted average holding period at the time of securitisation, and the minimum and maximum holding period. Source: SEBI circular dated 16 December 2025.
Who has to ensure the two rules are met?
The special purpose distinct entity. Regulation 30B(1) requires it to ensure the originator complies with the retention rule, and Regulation 30C(1) requires it to ensure loans are securitised only after the minimum holding period is complete. Source: SEBI SDI Regulations, 2008.
Flock tracks these filings, sourced, dated, and linked back to the original. See what smart-money entities disclosed, without the guesswork about what it means.
Disclosures shown are public regulatory filings. Data may be delayed or incomplete. Smart-money entities may no longer hold positions shown. Not investment advice.