SEBI warns investors against unregistered online bond platforms

After some high guaranteed return citing ads in newspapers, which were highly criticized by people on social media platforms, the Securities and Exchange Board of India (SEBI) has issued a public caution advising investors to steer clear of unregistered online bond platforms that are offering bond investment services without the mandatory regulatory approval.

In a release, issued on November 19, SEBI noted that several entities, including fintech firms and stockbrokers, have been operating as Online Bond Platform Providers (OBPPs) without securing registration from recognized stock exchanges, as required under a SEBI circular dated November 14, 2022.

SEBI warned that these unregistered platforms operate without any regulatory oversight and lack formal mechanisms for investor protection or grievance redressal. According to the regulator, activities carried out by such platforms may also violate provisions of the Companies Act, 2013, and the SEBI Act, 1992. SEBI had previously issued an interim order on November 18, 2024, against certain entities involved in similar practices.

The regulator has urged investors to verify the registration status of any OBPP before transacting and to rely solely on platforms approved by SEBI to safeguard their investments. Registration details can be checked on SEBI’s website (www.sebi.gov.in/online-bond-platform-providers.html), NSE website (https://www.nseindia.com/trade/members-compliance) and BSE (www.bseindia.com/downloads1/OBP_MEMBER_LIST.zip).