SEBI on Friday directed online bond platforms (OBPs) to desist from offering debt securities that are not listed or are not proposed to be listed, in contravention of their regulatory framework.
According to SEBI, certain OBP are “offering unlisted bonds/other products on a separate platform/web site and have not divested of such offerings” and certain OBPs “have a link on the online bond platform/web site to another platform/ web site for transacting in unlisted bonds/other products.”
‘Nascent stage’
Vishal Goenka, co-founder, IndiaBonds.com, a SEBI-registered Online Bond Platform Provider, said, “We are still in a nascent stage of education and awareness amongst non-institutional investors about the benefits of direct bonds and fixed-income investments. In this scenario, investor protection and knowledge are at the core of this journey. The circular ensures that listed/to-be-listed securities offered are not mixed with unlisted bonds or any other form of fixed-income financing for the investor.”
This is because listed securities have the highest amount of disclosure which is beneficial for the investor. The market has to grow in an open and transparent way, he added.
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SEBI has revised Clause 5.2 of the OBP circular to include a few new product categories such as government securities and listed sovereign gold bonds.
Under the revised clause 5.2, OBPPs can offer listed debt securities, listed municipal debt securities and listed securitised debt instruments; debt securities, municipal debt securities and securitised debt instruments proposed to be listed through a public offering; listed government securities, state development loans and treasury bills; and listed sovereign gold bonds.
“For any vibrant fixed-income market to develop, government securities are at the core of investment in a credit continuum. By allowing government securities and sovereign gold bonds to be offered on OBPPs, investors now have a choice of bond investments as per their own risk appetite,” Goenka added.