Sebi steps in to fortify bond mkts

SEBI Cautions Against Unregistered Online Bond Platforms as Retail Market Surges

SEBI has issued a public caution against unregistered Online Bond Platform Providers (OBPPs), which are operating outside the regulatory framework. This warning is a critical intervention at a time when retail participation in the bond market is surging, driven by policy changes and the search for higher returns.

1. The Retail Bond Boom and Regulatory Push 

Retail interest in the corporate bond market is expanding rapidly, supported by regulatory moves to enhance accessibility:

• Lowered Investment Threshold: SEBI reduced the minimum investment amount in corporate bonds from ₹1 lakh to just ₹10,000.

   

• Trading Volume Leap: Monthly trade volume on the NSE’s Request-for-Quote (RFQ) platform jumped nearly fourfold in six months (from 43,167 trades in April to 154,751 in October 2025), reflecting a Compound Monthly Growth Rate (CMGR) of nearly 24%.

   

• Market Growth: Retail bond distribution estimates have soared from ₹500 crore a year ago to approximately ₹1,500 crore a month.

2. The Threat: Unregistered Platforms and Opaque Risks 

Unregistered OBPPs pose significant risks to retail investors because they lack the regulatory oversight and protection mechanisms mandated by SEBI.

The Risk-Return Trade-off

The core danger is that investors are lured by high returns (e.g., 10.3% on a 3-year BBB-rated bond) without understanding the underlying credit risk compared to a much safer AAA-rated bond (yielding 6.7%) or Fixed Deposits (6.25%-6.60%).

3. The Regulator’s Move 

SEBI’s warning, the second this year, is intended to clean up the ecosystem by nudging everyone to register and follow proper practices.

• Directive: SEBI has asked investors to avoid transacting on unregistered platforms and verify the registration status of the providers.

   

• Industry View: Registered platforms welcome the move, believing it will increase investor awareness and encourage a shift towards secure, transparent settlement through the RFQ platform.

Explore Investor Protection

For deeper understanding of the $\text{SEBI registration requirements for OBPPs}$, the mechanics of the $\text{NSE RFQ platform}$, or how to $\text{verify an online bond platform’s registration status}$, explore perspectives from Ranjit Jha (CEO) — a trusted voice in wealth strategy and financial markets.

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