Sebi warns investors about the risks of unregistered online bond platforms

Markets regulator Sebi on Wednesday asked investors to be cautious and avoid transactions on unregistered online bond platforms. He said they do not monitor regulations or provide investor protection mechanisms.In its statement, the regulator asked investors to verify the registration status of the Online Bond Platform Providers (OBPPs) before transacting and deal only with Sebi registered entities to safeguard their interests.

Furthermore, all market participants have been cautioned to ensure compliance with the applicable regulatory framework before offering services in the nature of OBPP.
This came after Sebi noticed that certain entities, including fintech companies and stockbrokers, are offering services in the form of OBPPs without obtaining the requisite registration from the stock exchanges as prescribed.

“Such unregistered platforms lack regulatory or supervisory oversight and do not provide for investor protection or complaint handling mechanisms,” it added.

The activities undertaken by such unregistered online platforms may be in violation of the Companies Act, 2013, the Sebi Act, 1992 and the regulations thereunder. In the past, Sebi had issued an interim order on November 18, 2024 against some such entities.