Online bond platforms will now need to register as stock brokers: SEBI
Nov 15, 2022, 14:19 IST
Online bond platforms offering debt securities to non-institutional investors will now have to register as stock brokers in stock exchanges, the Securities and Exchange Board of India said in a circular.
While online bond platforms provide an avenue for investors, particularly non-institutional investors to access the bond market, their operations were outside the SEBI's regulatory purview, the circular put out on Monday said.
During the past few years, there has been an increase in the number of online bond platforms, offering debt securities, to non-institutional investors.
Most of such platforms are fintech companies or are backed by stock brokers/SEBI registered intermediaries. There has been a significant increase in the number of registered users who have transacted through such platforms.
"With the bond market offering tremendous scope for development,particularly in the non-institutional space, there is a need to place checks and balances in the form of transparency in operations and disclosures to the investors dealing with suchOBPs, measures for mitigation of payment and settlement risk, availability of redress mechanism in case of complaints, etc," the circular read.
Thus, in order to streamline the operations of these platforms and to facilitate the participation of investors in the bond market, SEBI felt there was a need to provide a regulatory framework for the working of such platforms.
The circular will come into force with immediate effect.
A platform that fails to comply with any of the provisions of the circular, shall be liable for action under the SEBI Act.
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While online bond platforms provide an avenue for investors, particularly non-institutional investors to access the bond market, their operations were outside the SEBI's regulatory purview, the circular put out on Monday said.
During the past few years, there has been an increase in the number of online bond platforms, offering debt securities, to non-institutional investors.
Most of such platforms are fintech companies or are backed by stock brokers/SEBI registered intermediaries. There has been a significant increase in the number of registered users who have transacted through such platforms.
"With the bond market offering tremendous scope for development,particularly in the non-institutional space, there is a need to place checks and balances in the form of transparency in operations and disclosures to the investors dealing with suchOBPs, measures for mitigation of payment and settlement risk, availability of redress mechanism in case of complaints, etc," the circular read.
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The circular will come into force with immediate effect.
A platform that fails to comply with any of the provisions of the circular, shall be liable for action under the SEBI Act.
SEE ALSO:
Sai Silks gets Sebi nod to float IPO; eyes to raise up to Rs 1,200 crore
Sebi approves Adani Group's open offer for 26% stake in NDTV