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MUMBAI: The Securities and Exchange Board of India (Sebi) has proposed allowing online bond platform providers (OBPPs) to expand operations in GIFT International Financial Services Centre (IFSC), widening their access to global debt markets.
In a consultation paper issued on Tuesday, the regulator said the move follows a request from the International Financial Services Centres Authority (IFSCA) to permit OBPPs to offer overseas-listed debt securities under a framework regulated by the GIFT City authority.
At present, Sebi allows stockbrokers to undertake securities market activities in GIFT City through a separate business unit or a subsidiary. OBPPs, though registered as stockbrokers in the debt segment, are not explicitly permitted to offer IFSCA-regulated products.
The proposal seeks to align OBPP operations with those of stockbrokers, subject to compliance with foreign exchange rules, including overseas investment limits under the Liberalised Remittance Scheme. OBPPs will also need to disclose investor grievance redress mechanisms for products regulated by authorities other than Sebi.
Separately, Sebi has proposed allowing OBPPs to offer tax-saving bonds issued under Section 54EC of the Income Tax Act. These bonds, issued by government-backed entities such as Power Finance Corp. Ltd, Indian Railway Finance Corp. Ltd, and REC Ltd, are currently exempt from mandatory listing requirements, creating ambiguity over their availability on online bond platforms.
According to the proposal, OBPPs must disclose key features of 54EC bonds, including eligible issuers, lock-in period, investment limits and tax benefits. They must also carry a disclaimer stating that these are specific tax-saving instruments and that grievance redressal for such investments does not fall under Sebi’s purview.
Sebi has also suggested easing norms for appointing compliance officers. Currently, OBPPs are required to appoint a company secretary, a condition not uniformly applicable to stockbrokers.
Following representations from the Institute of Chartered Accountants of India, the regulator has proposed aligning the requirement with stockbroker rules, allowing OBPPs to appoint compliance officers based on broader eligibility criteria rather than restricting the role to company secretaries.
Sebi has invited feedback on the consultation paper until 26 May.
Apoorva is a Mumbai-based journalist at Mint who covers the Securities and Exchange Board of India (SEBI), tracking the pulse of India’s capital markets, regulatory developments and the people who operate within them. She holds a postgraduate diploma in business and financial journalism from the Asian College of Journalism, where she developed a strong foundation in markets, companies, and economic policy. She began her journalism journey with an internship at Bloomberg, where she worked across beats such as real estate, infrastructure, capital markets, and deals, which helped her understanding of business and finance.<br><br>She is guided by the belief that everything in this world can be explained in simple and fewer words, and that idea shapes how she approaches her writing. She aims to cut through complexity and present nuanced regulatory and financial developments in a way that is both accessible and meaningful to readers.<br><br>When she is not tracking market chatter, Apoorva can usually be found deep into a fiction novel or out on a long run. She is also a trained classical dancer in Bharatanatyam, Mohiniyattam, and Kathakali.
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