Capital markets regulator SEBI 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 with SEBI or be run by SEBI-registered brokers.
According to the regulator, registration of the bond platforms as stock brokers under SEBI rules will be beneficial to the market and market participants, as the standard KYC requirements will be applicable while registering clients on bond platforms.
The proposed regulatory framework would attempt to ensure retention of the business potential and opportunities for the bond platforms and efficient offering of services to non-institutional investors.
In addition, the net worth and deposit requirements prescribed for stock brokers will ensure that the bond platform has sound and stable financial health and the applicability of the code of conduct mandated for stock brokers will ensure fairness in their dealings with clients.
SEBI said, “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.”
