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Mahesh

18/06/23 07:31 AM IST

Sebi Bars Online Bond Platforms From Selling Unlisted Bonds

In News
  • Securities and Exchange Board of India (Sebi) recently permitted online bond platform providers to offer government securities, sovereign gold bonds and several other instruments, enhancing investors' options.
Guidelines
  • SEBI’s guidelines restrict online bond platform providers from offering products other than listed debt securities on their platforms.
  • This ensures that investors have access to transparent and regulated investment options.
  • By focusing on listed debt securities, the guidelines enhance market integrity and reduce potential risks associated with unlisted bonds and other unregulated offerings. 
  • Online bond platform providers are allowed to offer a range of securities on their platforms.
  • These include Government Securities, Treasury Bills, listed Sovereign Gold Bonds, listed municipal debt securities, and listed securitized debt instruments.
  • These permissible offerings provide investors with diversified options and facilitate their participation in the bond market.
  • Under the new rules, online bond platform providers are required to register as stockbrokers in the debt segment of the stock exchange.
  • This registration ensures that OBPPs operate within a regulated framework, adhere to established norms, and maintain the necessary professional standards. By being registered as stockbrokers, OBPPs demonstrate their commitment to transparency, accountability, and investor protection.
Penalties
  • SEBI’s guidelines make it clear that entities acting as online bond platform providers must strictly adhere to the permissible product offerings outlined in the rules. Failure to comply with these guidelines will result in the cessation of offering such products on their platforms or any other platform website.
  • This underscores the importance of adherence to regulatory requirements and safeguards the interests of investors. 
  • The guidelines also address the issue of unauthorized usage of an online bond platform provider’s name, brand name, or any similar name by its holding company, subsidiary, or associate for unregulated products or services.
Source- Outlook India

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