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The Securities and Exchange Board of India (SEBI) recently issued guidelines to regulate online bond platform providers' (OBPPs) product offerings. These guidelines are intended to ensure compliance, protect investors' interests, and streamline the bond market's operation.

Product Offering Restrictions

According to SEBI guidelines, online bond platform providers are not permitted to offer products other than listed debt securities on their platforms. This provides investors with transparent and regulated investment options. The guidelines improve market integrity and reduce potential risks associated with unlisted bonds and other unregulated offerings by focusing on listed debt securities. 

Securities That Can Be Offered

The circular allows online bond platform providers to offer a variety of securities on their platforms. Government securities, Treasury bills, listed sovereign gold bonds, listed municipal debt securities, and listed securitized debt instruments are examples of these. These permissible offerings give investors a variety of options and make it easier for them to participate in the bond market. 

Obligation To Register For OBPPs

Online bond platform providers must now register as stockbrokers in the debt segment of the stock exchange under the new rules. This registration ensures that OBPPs operate within a regulated framework, follow established norms, and uphold the required professional standards. OBPPs demonstrate their commitment to transparency, accountability, and investor protection by being registered as stockbrokers. 

Consequences Of Noncompliance

SEBI's guidelines state unequivocally that entities acting as online bond platform providers must strictly adhere to the rules' permissible product offerings. Failure to follow these guidelines will result in the removal of such products from their platforms and any other platform website. This emphasizes the importance of adhering to regulatory requirements and protects investors' interests. 

Brand Name And Namesake Protection

The guidelines also address the issue of an online bond platform provider's holding company, subsidiary, or associate using its name, brand name, or any similar name for unregulated products or services. Such unauthorized use is prohibited, ensuring that investors can trust the legitimacy of the platform provider's offerings. 

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