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SEBI proposed new rules for online bond platforms

July 22, 2022

SEBI proposed new rules for online bond platforms
Capital markets regulator Sebi on Thursday proposed a regulatory framework for the online bond platforms that are selling listed debt securities.

Under the proposal, bond platforms should register as stock brokers (debt segment) with the Securities and Exchange Board of India (Sebi) or be run by Sebi-registered brokers, according to a consultation paper.

This will also enhance the confidence among investors, particularly non-institutional investors, as the platforms would be provided by Sebi-regulated intermediaries.

Additionally, the stock-broker regulations will be applicable to these entities, which would govern their code of conduct and other aspects related to their operations and risk management.

“The debt securities offered for buy/ sale by the online bond platforms shall be only listed debt securities,” Sebi proposed.

It has been proposed that listed debt securities issued on a private placement basis, offered for sale on bond platforms should be locked in for a period of six months from the date of allotment of such debt securities by the issuer.

“It was observed that there is an imperative need to govern the operations of these online bond platforms, keeping in mind the core objective of facilitation of efficient trading and robust investor protection norms for investors, particularly non-institutional investors,” Sebi said.

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