Even as online platforms make corporate bonds more accessible to retail investors, the market regulator has stepped in to warn that not all players are playing by the rules.
The Securities and Exchange Board of India (Sebi) cautioned investors against using unregistered online bond platform providers (OBPP), bringing into focus fintech companies and stockbrokers that are providing bond-dealing services without the regulator’s approval.
“It has been observed that certain entities, including fintech companies and stock brokers, are offering services in the nature of OBPPs without obtaining due registration from the Stock Exchanges,” Sebi said in a notice on Wednesday.
Such entities, the market regulator said, are operating outside the regulatory perimeter and do not offer any investor protection framework or grievance-redress mechanism.
Currently, there are 18 OBPPs that allow investors to buy and sell corporate bonds online. Sebi introduced a framework for such platforms in November 2022 to ensure regulation in the industry. The market watchdog mandated all OBPPs to register as stockbrokers in the debt segment of the stock exchanges.
OBPPs have played a vital role in improving retail investor participation in the Indian bond market by easing access to the instrument. It has opened up the bond market to retail investors, making bond purchases as accessible and transparent as equity trading, said a 2025 report by Ernst and Young.
Despite this, Sebi noted several players continue to operate without registration, potentially violating the Companies Act, the Sebi Act and various regulations governing securities distribution.
The regulator pointed out that it had passed an interim order in November 2024 against a few such entities for offering corporate bond trading to retail investors without authorization.
“Investors are urged to exercise caution and avoid transacting on unregistered online bond platforms. Investors should verify the registration status of the OBPPs prior to transacting, and deal only with SEBI registered entities, in order to safeguard their interests,” Sebi said in the notice.
OBPPs appreciated Sebi’s caution, while pointing out that the regulator’s framework has helped weed out unregistered players in the past few years.
“After Sebi’s regulation in 2022, not a lot of platforms are selling bonds without registration. I think it is just a precautionary notice,” said Suresh Darak, founder of Bondbazaar, an online bond platform.
“If there are unregistered players, retail investors should be cautious. Registered OBPPs have a Sebi-registered number on their website. If this number is absent, it means they are not registered,” he added.
