Capital markets regulator Sebi on Friday restricted on-line bond platform suppliers from providing merchandise apart from listed debt securities on their platforms. As well as, the regulator allowed them to supply securities corresponding to Authorities Securities, Treasury Payments, listed Sovereign Gold Bonds, listed municipal debt securities, and listed securitised debt devices on their on-line bond platforms, in keeping with a round.

Beneath the principles, On-line Bond Platform Suppliers (OBPPs) must register themselves as inventory brokers within the debt phase of the inventory change.

OBPs provide an avenue for traders, notably non-institutional traders to entry the bond market.

Whereas proscribing merchandise provided on a web-based bond platform, Sebi reiterated that an entity performing as a web-based bond platform supplier would stop to supply on its platform or another platform web site, services or products not permitted beneath the principles.

It, additional, mentioned that the holding firm, subsidiary, or affiliate of a web-based bond platform supplier won’t utilise the identify, model identify, or any identify resembling that of the net bond platform supplier for providing services that aren’t regulated by a monetary sector regulator.

This comes after Sebi famous that a number of OBPPs have commenced operations and noticed that sure OBPPs proceed to supply merchandise apart from listed debt securities and debt securities proposed to be listed by means of a public providing on their platforms.
Additionally, they’re providing unlisted bonds on a separate platform or web site and haven’t divested such choices. Furthermore, sure OBP suppliers have given a hyperlink on the net bond platform to a different platform for transacting in unlisted bonds and different merchandise, Sebi famous. Such practices are in contravention of NCS (Problem and Itemizing of Non-Convertible Securities) Rules.

The brand new framework would come into drive with speedy impact, the Securities and Change Board of India (Sebi) mentioned.

In February, Sebi prolonged the timeline by three weeks starting February 9 for entities, working as on-line bond platform suppliers, to make an utility for registration as inventory brokers.

Through the previous few years, there was a rise within the variety of OBPPs providing debt securities to non-institutional traders. Most of them are fintech firms or are backed by inventory brokers. There was a major enhance within the variety of registered customers who’ve transacted by means of such OBPs.

Whereas OBPs give a platform for traders to entry the bond market, their operations have been outdoors Sebi’s regulatory purview, and accordingly, the regulator notified the framework for entities working or desirous of working as OBPPs in November 2022.

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