SEBI's Proposed Regulatory Framework For Online Bond Platforms

INTRODUCTION

Issuance of listed debt securities in India is currently by way of: (a) public issuance through the Stock Exchanges and Depositories; and (b) private placements to an identified set of mostly institutional investors. Over the last 3 financial years, the Securities Exchange Board of India (SEBI) has observed that the volume of private placements has far exceeded that of public issuances. It has also noted that, within private placements, the investor class has largely been restricted to institutional investors. This has resulted in an increase in the number of online bond platforms which facilitate investments in both listed and unlisted debt securities by non-institutional investors. So far these bond platforms were not under any regulatory purview.