Sebi Flags Risks of Unregulated Online Bond Platforms
The Securities and Exchange Board of India (Sebi) has issued a caution against dealing with unregulated online bond platforms that offer unlisted debt securities. According to the regulator, several fintech companies and stock brokers are operating as online bond platform providers (OBPPs) without the mandatory registration from stock exchanges, as required under Sebi regulations issued in November 2022. These unregistered platforms lack regulatory oversight and do not provide mechanisms for investor protection or grievance redressal.
Sebi emphasized that transactions through such platforms could potentially violate the Companies Act, 2013, the Sebi Act, 1992, and other regulations. Investors are advised to exercise caution, verify the registration status of OBPPs, and deal only with Sebi-registered entities to safeguard their interests. The warning follows a similar advisory issued in November 2024, highlighting the continued risks posed by unregulated online bond trading.
The regulator also noted that any disputes arising from dealings on unregistered platforms will not have the protections available under regulated channels. In the past, Sebi had banned three unregistered online bond platforms—altGraaf, Tap Invest, and Stable Investments—from selling securities, underscoring its commitment to investor protection.
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