Online Bond Platform under the SEBI framework

In an effort to streamline their operations, the Securities and Exchange Board of India (SEBI) recently released a comprehensive regulatory framework for online bond platform providers.

Online Bond Platform

According to SEBI, an online bond platform is any electronic system other than a recognised stock exchange or an electronic book that offers a platform on which debt securities are offered and transacted that are listed or intended to be listed.

Reasons for a regulatory framework for Online Bond Platform Providers (OBPPs)

  • Over the recent years, there have been more OBPPs that issue debt securities to non-institutional investors. The majority of them are stock broker-backed or fintech startups.
  • OBP operations, however, fell outside of SEBI’s regulatory purview. Consequently, this regulatory framework was created.

Regulatory framework for OBPPs: Provisions

  • Online Bond Platform Providers (OBPPs) are businesses with Indian corporate structures that need to register as stockbrokers on the debt market of the stock exchange.
  • The only goods or services that OBPPs may sell on its platform are listed debt securities and debt securities that are being considered for listing through a public offering.
  • In addition, the OBPPs would be responsible for ensuring that the minimal disclosure standards were met. Additionally, it would be required to disclose on its platform any and all potential conflicts of interest resulting from its dealings or transactions with connected parties.
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