The Securities and Exchange Board of India on 21st July 2022, has proposed a regulatory framework for the online bond platforms that are selling listed debt securities. Bond platforms play the role of facilitators, thereby facilitating transactions by investors registered on their websites. Therefore, it is proposed that these bond platforms should register as stock-brokers (debt segment) with SEBI or be run by SEBI registered brokers.
The debt securities offered for buy/ sale by the online bond platforms shall be only listed debt securities.It is proposed that listed debt securities issued on private placement basis, offered for sale on bond platforms shall be locked-in for a period of six months from the date of allotment of such debt securities by the issuer.
Registration of the bond platforms as stock brokers under SEBI Regulations will be beneficial to the market and market participants as:
- The standard KYC requirements will be applicable while registering clients on bond platforms.
- The Net worth and deposit requirements prescribed for stock brokers will ensure that the bond platform has a sound and stable financial health.
- The applicability of code of conduct mandated for stock brokers will ensure fairness in their dealings with clients.
- They will be subjected to regulatory inspection and oversight, providing more confidence to investors and hence, will have the potential to attract more investors.
The proposed framework would attempt to ensure retention of the business potential and opportunities for the bond platforms and efficient offering of services to non-institutional investors.
SEBI has invited comments from the public on the proposed regulatory framework, which shall be addressed to pradeepr@sebi.gov.in; nikhilc@sebi.gov.in; and kirand@sebi.gov.in or by post to Pradeep Ramakrishnan, General Manager, Department of Debt & Hybrid Securities Securities and Exchange Board of India, SEBI Bhavan, C4-A, G-Block, Bandra Kurla Complex, Bandra (East), Mumbai – 400051 within 12th August 2022.
