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Stock-broker licence may soon become mandatory for online bond platforms. The proposal is part of SEBI's consultation paper to introduce regulations for such platforms.
If the regulation comes into force in the present form, online bond platforms will be prohibited from offering unlisted bonds. Additionally, all transactions will have to be routed through exchange platforms — either directly or through the request for quote (RFQ) platform.
This implies that such platforms will not be allowed to make off-market trades.
Moreover, the regulation proposes a 6-month lock-in for debt securities issued on private placement basis on bond platforms.
SEBI said the regulations will be benefitial in the following ways:
1. Net worth and deposit requirements prescribed for stock brokers will ensure that the bond platform has a sound and stable financial health.
2. The applicability of code of conduct mandated for stock brokers will ensure fairness in their dealings with clients
3. They will be subjected to regulatory inspection and oversight
4. Standard KYC requirements will be required while registering clients
