SEBI directs online bond platforms to stop selling unlisted securities

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SEBI Last Friday it directed online bond platforms (OBPs) to refrain from offering debt securities that are not listed or are not proposed for listing, in contravention of their regulatory framework.

According to SEBI, some OBPs “offer unlisted bonds/other products on a separate platform/website and have not given up such offerings” and some OBPs “have a link on their online bonds platform/website to another non-listed bonds platform/website Listed/other products.

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Vishal Goenka, Co-Founder of IndiaBonds.com, a SEBI-registered Online Bond Platform Provider said, “We are still at an emerging stage of education and awareness among non-institutional investors about the benefits of direct bonds and fixed income investments. In this scenario, investor protection and knowledge are at stake. The core of this journey. The publication ensures that listed/to-be-listed securities are not mixed with unlisted bonds or any other form of fixed income financing for the investor.”

This is because the listed securities have the most disclosure which is beneficial to the investor. He added that the market should grow in an open and transparent manner.

Also read: SEBI fines 15 individuals for EGP 87,000 for price manipulation of Kapil Raj Finance shares

SEBI revised Section 5.2 of the OBP circular to include some new product categories such as government securities and listed sovereign gold bonds.

Under the amended clause 5.2, OBPPs may offer listed debt securities, listed municipal debt securities and listed securitized debt instruments; Debt securities, municipal debt securities and securitized debt instruments proposed to be listed through a public offering; listed government securities, government development loans, and treasury bills; listed sovereign gold bonds.

“For any active fixed income market to develop, government securities are at the core of investing in credit continuity. By allowing government securities and sovereign gold bonds to be offered on OBPPs, investors now have the option of bond investments according to their risk appetite,” added Goenka.