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ARTICLE · 03 DECEMBER 2025

SEBI's Incentive Push: A New Boost For India's Public Debt Market

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The Securities and Exchange Board of India (SEBI) vide its circular no. CIR. /IMD/DF/22/2011 - Public issue of Debt Securities- Prohibition on payment of incentives dated 26 December 2011 (Circular) prohibited payment of incentives by a person connected with a public issue of debt securities to a potential investor for making an application for allotment of specified securities

IndiaFinance and Banking
Soumya Mohapatra
Soumya Mohapatra
Mishi Malhotra
Mishi Malhotra
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Introduction

The Securities and Exchange Board of India (SEBI) vide its circular no. CIR. /IMD/DF/22/2011 - Public issue of Debt Securities- Prohibition on payment of incentives dated 26 December 2011 (Circular) prohibited payment of incentives by a person connected with a public issue of debt securities to a potential investor for making an application for allotment of specified securities. This circular was issued by SEBI as some brokers/ distributors were passing on part of their brokerage or commission to the final investors for subscription to such public issue of debt, giving an unfair advantage to some investors adding to the cost of issuance for the company.

In 2021, when the SEBI (Issue and Listing of Debt Securities) Regulations, 2008 (now the SEBI (Issue and Listing of Non-Convertible Securities), 2021 (NCS Regulations)) were being amended, this Circular was subsumed in the NCS Regulations. However, SEBI, in the early part of calendar year 2024

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