At the same time as on-line platforms make company bonds extra accessible to retail traders, the market regulator has stepped in to warn that not all gamers are enjoying by the principles.
The Securities and Change Board of India (Sebi) cautioned traders towards utilizing unregistered on-line bond platform suppliers (OBPP), bringing into focus fintech corporations and stockbrokers which can be offering bond-dealing companies with out the regulator’s approval.
“It has been noticed that sure entities, together with fintech corporations and inventory brokers, are providing companies within the nature of OBPPs with out acquiring due registration from the Inventory Exchanges,” Sebi stated in a discover on Wednesday.
Such entities, the market regulator stated, are working exterior the regulatory perimeter and don’t provide any investor safety framework or grievance-redress mechanism.
At the moment, there are 18 OBPPs that enable traders to purchase and promote company bonds on-line. Sebi launched a framework for such platforms in November 2022 to make sure regulation within the business. The market watchdog mandated all OBPPs to register as stockbrokers within the debt phase of the inventory exchanges.
OBPPs have performed a significant function in enhancing retail investor participation within the Indian bond market by easing entry to the instrument. It has opened up the bond market to retail traders, making bond purchases as accessible and clear as fairness buying and selling, stated a 2025 report by Ernst and Younger.
Regardless of this, Sebi famous a number of gamers proceed to function with out registration, doubtlessly violating the Corporations Act, the Sebi Act and numerous rules governing securities distribution.
The regulator identified that it had handed an interim order in November 2024 towards just a few such entities for providing company bond buying and selling to retail traders with out authorization.
“Traders are urged to train warning and keep away from transacting on unregistered on-line bond platforms. Traders ought to confirm the registration standing of the OBPPs previous to transacting, and deal solely with SEBI registered entities, in an effort to safeguard their pursuits,” Sebi stated within the discover.
OBPPs appreciated Sebi’s warning, whereas declaring that the regulator’s framework has helped weed out unregistered gamers up to now few years.
“After Sebi’s regulation in 2022, not lots of platforms are promoting bonds with out registration. I feel it’s only a precautionary discover,” stated Suresh Darak, founding father of Bondbazaar, an internet bond platform.
“If there are unregistered gamers, retail traders ought to be cautious. Registered OBPPs have a Sebi-registered quantity on their web site. If this quantity is absent, it means they aren’t registered,” he added.
