Sebi Cautions Investors on Unregistered Online Bond Platforms
Why in the news
Sebi issued a public alert against using online bond platforms that have not registered with it, because they operate without any supervision.
Key facts
- Regulator: Securities and Exchange Board of India (Sebi).
- Risks flagged: no regulatory or supervisory oversight, no investor protection or grievance redressal.
- Their activity may break the Companies Act and the Sebi Act, 1992.
About OBPPs
- Online Bond Platform Providers are regulated entities offering an electronic venue for issuing, trading and settling corporate bonds, government securities and other debt instruments.
- Purpose: greater transparency, liquidity and easy access for retail and institutional investors, widening the digital bond market.
- Governing law: SEBI (Online Bond Platform Providers) Regulations, 2022, covering registration, compliance, disclosure and reporting, and the conduct of digital issuance, trading and settlement.
Features of regulated OBPPs
| Feature | Detail |
|---|---|
| Access | Buy, sell and track bonds online, bypassing traditional brokers |
| Registration | Must be registered with Sebi and follow its debt securities trading and settlement framework |
| Custody | Holdings usually in demat accounts via NSDL/CDSL |
| Transparency | Live pricing, yield and liquidity data; standard details on issuers, ratings, coupons and redemption |
| Investors | Retail, high-net-worth and institutional |
| Bond types | Corporate bonds, government securities, tax-free bonds, municipal bonds where allowed |
| Settlement | Digital, through clearing corporations; KYC and AML norms apply |
Exam angle
- Governing rules: SEBI (OBPP) Regulations, 2022.
- Depositories: NSDL and CDSL.
- Warning basis: unregistered platforms lack oversight.