SEBI Expands Online Bond Platform Rules, Allows IFSCA Products And 54EC Bonds
· Free Press Journal
The Securities and Exchange Board of India (SEBI) has widened the scope of products and services that can be offered by Online Bond Platform Providers (OBPPs), allowing them to list certain products regulated by the International Financial Services Centres Authority (IFSCA) as well as bonds issued under specified provisions of income-tax law.
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The regulator has also changed the rules governing the appointment of compliance officers by OBPPs. SEBI said the measures were introduced following feedback from market participants and are intended to improve ease of doing business. The revised provisions have come into effect immediately.
OBPPs get wider product offering
Under the updated framework, online bond platforms can now offer products, securities and services regulated by financial sector regulators including SEBI, the Reserve Bank of India (RBI), the Insurance Regulatory and Development Authority of India (IRDAI), IFSCA and the Pension Fund Regulatory and Development Authority (PFRDA).
Sebi Revises InvIT Cash Flow Rules To Allow Debt-Funded Road Maintenance Costs In NDCF CalculationOBPPs can also offer bonds issued under Section 54EC of the Income Tax Act, 1961, as well as those issued under Section 85 of the Income-tax Act, 2025.
For IFSCA-regulated products, platforms will have to follow the framework applicable to SEBI-registered stock brokers operating in GIFT-IFSC. They will also be required to comply with relevant provisions under the Foreign Exchange Management Act (FEMA), including rules governing overseas investments and the limits prescribed under the Liberalised Remittance Scheme (LRS).
To distinguish these products from domestic debt securities, OBPPs must clearly identify IFSCA-regulated offerings as “international” or “overseas instruments”. Platforms will also have to disclose the applicable grievance redressal mechanism to investors.
The revised framework lays down separate requirements for 54EC bonds. These instruments can be offered through a dedicated section on the online bond platform or through another website or platform.
New compliance officer framework
OBPPs offering 54EC bonds will have to clearly inform investors that these are tax-specific instruments. Platforms must also state that complaints relating to these bonds will not fall under SEBI's grievance redressal mechanism and instead need to be addressed to the issuer.
In addition, platforms must disclose important information about 54EC bonds, including the eligible issuers, lock-in period, investment limits and whether the securities can be transferred.
Details concerning tax benefits, minimum or applicable application size and exemption from listing requirements under SEBI's Listing Obligations and Disclosure Requirements (LODR) Regulations must also be provided.
SEBI has separately modified the compliance officer requirement for OBPPs. Under the earlier framework, platforms were required to appoint a Company Secretary as their compliance officer.