The Securities and Exchange Board of India on 14th November 2022, notified the regulatory framework for the working of Online Bond Platforms (OBPs), in order to streamline the operations of OBPs and to facilitate the participation of investors in the bond market.
Any entity operating or desirous of operating an Online Bond Platform (OBP) (hereinafter referred to as the ‘entity’) shall, after obtaining registration as a stock broker in the debt segment of Stock Exchange(s), apply to a recognized stock exchange to act as an Online Bond Platform Provider (OBPP) as specified under NCS Regulations.
In its application, the entity shall ensure that the following requirements are met and confirmations / undertakings are provided:
- The entity has appointed a Company Secretary as a compliance officer and the entity has appointed at least two qualified key managerial personnel with experience of at least three years in the securities market.
- The entity has obtained a SEBI Complaints Redress System (SCORES) authentication and has put in place a well-defined mechanism to address grievances that may arise or likely arise while carrying out OBP operations.
The entity shall comply with Know Your Client (KYC) requirements and verify the identity of its investors and sellers by requiring them to submit necessary documents undertaking necessary steps for this purpose.
The entity shall ensure that:
- All Orders with respect to listed debt securities placed on OBP are mandatorily routed through the Request for Quote platform (RFQ) of the recognised Stock Exchange(s) and settled through the respective Clearing Corporations.
- All Orders with respect to debt securities proposed to be listed through a public offering placed on OBP shall be mandatorily routed and settled through the stock exchange mechanism.