SEBI vide its press release dated November 19, 2025[1] has cautioned investors about certain fintech companies and stockbrokers operating as Online Bond Platform Providers (OBPPs) without obtaining mandatory registration under SEBI’s November 14, 2022[2] circular (“November 2022 Circular”) regarding SEBI’s Framework for OBPPs which was later amended by way of the SEBI circular dated June 16, 2023[3] (“June 2023 Circular”) (November 2022 Circular and June 2023 Circular shall collectively mean, “SEBI OBPP Framework”). Further, SEBI has also referred toan interim order dated November 18, 2024[4] passed by a whole-time member of SEBI against certain OBPPs operating without registration. In this article, we analyse the SEBI OBPP Framework and its implications for OBPPs.

Background and Rationale for SEBI OBPP Framework

SEBI observed a sharp rise in the number of online platforms offering listed and privately placed debt securities to retail investors. The exponential growth of registered users and transaction volumes highlighted the need for oversight, especially given that these platforms facilitated trades outside traditional stock exchange frameworks. As SEBI noted, the absence of regulatory checks exposed investors to risks such as payment and settlement vulnerabilities, inconsistent disclosures, ambiguity in grievance redressal and potential misuse of investor data. The SEBI OBPP Framework introduced in 2022 sought to bring uniformity, increase transparency and mitigate systemic and operational risks associated with online distribution of these products.

Registration and Eligibility Requirements

As per the SEBI OBPP Framework, any entity wishing to operate as an OBPP must be incorporated in India and registered as a stockbroker in the debt segment of a recognised stock exchange. Existing platforms operating prior to November 2022 were required to transition to compliance. OBPPs are required to apply to the recognised stock exchanges for registration and appoint a company secretary as the compliance officer and at least two qualified key managerial personnel with experience in the securities market. OBPPs are also required to also obtain authentication on SEBI’s SCORES grievance platform and ensure timely resolution of complaints. Further, the investor grievance mechanism established by them must be in accordance with the SEBI’s Master Circular for Stock Brokers dated May 17, 2023.

Scope of Permitted Securities

One of the most critical components of the SEBI OBPP Framework is the restriction on the securities that may be offered on online bond platforms. As per the SEBI OBPP Framework, OBPPs may offer the following eligible securities:

Listed debt securities, listed municipal debt securities and listed securitised debt instruments;
Debt securities, municipal debt and securitised debt instruments proposed to be listed through a public offering;
Listed government securities, State Development Loans (SDLs) and Treasury Bills; and
Listed Sovereign Gold Bonds.

Further, OBPPs and their group entities are prohibited from using similar brand names to offer unregulated products. Links from the OBPP website to group entities dealing in unregulated products must be removed. Where links are provided to activities regulated by the Reserve Bank of India (RBI), the Insurance Regulatory and Development Authority of India (IRDAI) or the Pension Fund Regulatory and Development Authority (PFRDA), a mandatory disclaimer must be prominently displayed.

Operational and Technology Framework

SEBI requires OBPPs to maintain technologically robust systems characterised by high levels of reliability, scalability and security in respect of their systems, data and network. Platforms must disseminate transaction-related information on a real-time or near-real-time basis, ensure data privacy, enable non-discriminatory access and institute systems that prevent unauthorised data sharing.

Platforms must also adopt clear and transparent criteria for user registration, undertake due diligence of investors and sellers, comply with Know Your Client (KYC) requirements and verify the identity of investors and sellers. OBPPs are also expected to establish written policies governing order execution, roles and responsibilities, liability frameworks and access restrictions.

Investor Disclosures and Documentation

SEBI prescribes detailed disclosure requirements for each eligible security offered on the platform of OBPPs, which inter alia include the issuer’s name, ISIN, security type, rating rationale, coupon structure, maturity, yield calculations, face value and details of the offer document. OBPPs must present this information in a fair, accurate and non-discriminatory manner, ensuring data integrity and investor privacy.

Order Execution, Confirmations and Alerts

All orders with respect to eligible securities placed on OBPPs are mandatorily routed through the Request for Quote (RFQ) platform of the recognised stock exchange(s) and settled through the respective clearing corporations. Further, all orders with respect to debt securities proposed to be listed through a public offering and placed on OBPPs must be mandatorily routed and settled through the stock exchange mechanism.

To enhance transparency and prevent disputes, OBPPs must issue electronic order receipts immediately upon placement of an order, followed by deal sheets after execution. Sellers, where applicable, must receive quote receipts. Platforms must also provide timely alerts and transactional updates through SMS or email. SEBI emphasises stringent risk management protocols designed to prevent unauthorised access, address conflicts of interest and ensure orderly, non-discretionary execution of all transactions. Controls must also be established to minimise erroneous trades or operational lapses.

Advertisements and Investor Protection

The SEBI OBPP Framework has also prescribed an advertisement code, which inter alia prohibits misleading, deceptive or exaggerated statements. Advertisements must be accurate, simple, fair and free from promotional hype. The use of celebrities, testimonials or subjective comparisons is explicitly barred. All advertisements must carry the mandatory risk warning relating to investments in debt securities.

Data Integrity, Reporting and Oversight

OBPPs are required to maintain data in secure, easily retrievable formats and ensure confidentiality. They must disclose conflicts of interest transparently and report periodically to stock exchanges on transactions, security offerings and any changes in previously furnished information. Significant disruptions, operational failures or potential market abuse must be reported to stock exchanges without delay.

Stock exchanges are tasked with monitoring the operations of OBPPs and ensuring uniform compliance across platforms.

[1] PR No.: 75/2025 (Caution to Public regarding unregistered Online Bond Platform Providers)

[2] Circular No.: SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2022/154 (Registration and regulatory framework for Online Bond Platform Providers)

[3] Circular No.: SEBI/HO/DDHS/POD1/P/CIR/2023/092 (Adherence to provisions of regulation 51A of SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 by Online Bond Platform Providers on product offerings on Online Bond Platforms)

[4] Orders of Chairperson/Members WTM/AB/DDHS/DDHS-SEC-1/30990/2024-25 (Interim Ex Parte Order in the matter of Unregistered Online Bond Platforms)

SEBI’s Framework for Online Bond Platform Providers