Modifications to provisions of Chapter XXI of NCS Master Circular dealing with registration and regulatory framework for Online Bond Platform Providers (OBPPs)

SEBI/HO/DDHS/POD1/P/CIR/2023/194                                                      

[1]SEBI, through its circular dated December 28, 2023, has implemented modifications to the provisions of Chapter XXI of the NCS Master Circular, aiming to enhance the ease of doing business for Online-Based Platforms for Bonds and Pass-through Certificates (OBPPs), considering feedback from market participants.

Under this circular, OBPPs are now permitted to offer various securities, including listed Debt Securities, listed Municipal Debt Securities, Government Securities, Treasury Bills, listed Sovereign Gold Bonds, and other products or securities regulated by financial sector regulators such as SEBI, RBI, IRDAI, or PFRDA, on their online bond platforms.

The circular outlines specific requirements for agreements, receipts, and advertisements by OBPPs on their online platforms. Non-compliance with these requirements may result in actions under the SEBI Regulatory Framework (Acts, Rules, Regulations, and Circulars).

SEBI mandates that OBPPs must promptly issue an electronic order receipt after the placement of an order, containing details such as the date and time of the order, information about the counter-parties, and the quantity and amount proposed for the transaction. Following the execution of the order, the entity must provide investors with a deal sheet for all transactions, including relevant information such as the order placement date and time, settlement details, counter-parties involved, and the quantity and amount transacted.

Furthermore, all advertisements by OBPPs must include a standard warning in legible font, stating, “investments in debt securities/municipal debt securities/securitized debt instruments are subject to risks, including delay and/or default in payment. Read all the offer-related documents carefully.”

Stock Exchanges are directed to monitor the operations of OBPPs and disseminate this circular on their websites. These measures aim to foster transparency and protect investor interests in the bond market.

[1] https://www.sebi.gov.in/legal/circulars/dec-2023/modifications-to-provisions-of-chapter-xxi-of-ncs-master-circular-dealing-with-registration-and-regulatory-framework-for-online-bond-platform-providers-obpps-_80235.html