Sebi proposes tighter curbs on promotional claims by online bond platforms
Sebi is tightening the reins on advertising practices for online bond platforms, aiming to protect investors from hasty decisions. New rules mandate that promotional content provides standardized information about specific securities. Terms such as 'fixed returns' must be accompanied by explicit risk disclaimers, while ambiguous claims like 'high yield' will also be subject to regulatory…
The Securities and Exchange Board of India (Sebi) has proposed stricter rules on advertising practices for online bond platforms to protect investors from making hasty decisions. According to The Economic Times, the new rules would require promotional content to provide standardized information about specific securities. This includes disclosing the issuer, tenor, credit rating, and relevant rating information, as well as whether the security is secured or unsecured.
The Hindu BusinessLine reports that advertisements would also need to carry a warning that fixed returns are not guaranteed and that debt securities are subject to market, credit, and default risks. Additionally, terms such as "fixed returns" must be accompanied by explicit risk disclaimers, while ambiguous claims like "high yield" will be subject to regulatory scrutiny.
Sebi also aims to broaden retail participation in corporate bonds by introducing a network of Fixed Income Channel Partners (FICPs) to bring online bond investing to smaller cities. The distribution model would be similar to that of mutual fund distributors, with FICPs assisting investors with onboarding, documentation, and transactions, but orders would have to be routed directly through the online bond platform.
Brief written by urgent.news from The Economic Times - Top News, Business Standard IN, Hindu BusinessLine — 3 reports on this story. Machine-written — may contain errors; check the original before relying on it.
