The Securities and Exchange Board of India (Sebi) has approved online bond platform providers (OBPPs) to offer products and securities regulated by the International Financial Services Centres Authority (IFSCA), the unified regulator in GIFT-IFSC. According to the regulator's latest circular dated August 14, 2026, this move is aimed at easing business operations and widening investment options available through online bond platforms. The regulatory framework expansion represents a significant step toward promoting ease of doing business in the debt securities market, with the changes taking effect immediately from the date of issue. The revised framework amends Chapter XXI of the SEBI NCS Master Circular dated October 15, 2025, which itself consolidates the OBPP framework that Sebi originally introduced under Regulation 51A of the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021. As reported by SocialNews.XYZ, ET Now, The Economic Times, and The Times of India, these changes have been prompted by "certain suggestions received from various stakeholders to promote ease of doing business" in the debt securities market.
Under the revised framework, OBPPs can now offer products or securities regulated by financial sector regulators, including Sebi, the Reserve Bank of India (RBI), the Insurance Regulatory and Development Authority of India (IRDAI), IFSCA and the Pension Fund Regulatory and Development Authority (PFRDA). As reported by SocialNews.XYZ, ET Now, The Economic Times, and The Times of India, Sebi has also approved the offering of specified tax-saving bonds issued under Section 54EC of the Income-tax Act, 1961, and Section 85 of the Income-tax Act, 2025 through these platforms. The expanded scope allows OBPPs to provide a broader range of financial products while maintaining strict compliance requirements for international securities offerings. The new framework introduces clause 5.2.6 specifically for bonds issued under Section 54EC of the Income Tax Act, 1961, or Section 85 of the Income-tax Act, 2025 - the capital-gains tax-saving bonds typically issued by entities like NHAI, REC and PFC. These bonds let an investor who has made a long-term capital gain avoid capital gains tax by reinvesting the gain into these specific bonds within a set window. The full product menu for OBPPs now includes listed debt securities, municipal and securitised debt instruments, government securities, SDLs, Treasury Bills, Sovereign Gold Bonds, products regulated by SEBI, RBI, IRDAI, IFSCA or PFRDA, and the newly added Section 54EC bonds.
IFSCA-regulated products, securities or services will be offered in compliance with applicable guidelines under the Foreign Exchange Management Act (FEMA), 1999, including Overseas Investment Rules and limits under the Liberalised Remittance Scheme (LRS). According to SocialNews.XYZ, ET Now, The Economic Times, and The Times of India, such offerings must be offered in accordance with the framework applicable to Sebi-registered stock brokers operating in GIFT-IFSC. To avoid confusion between domestic and overseas investment products, SEBI has mandated that IFSCA-regulated offerings be clearly labelled as international or overseas instruments on online bond platforms. The revised provisions allow products regulated by financial sector regulators to be offered either under a separate tab on an OBPP's online bond platform or on another website or platform. Clause 5.2.5 now includes IFSCA alongside existing regulators, with products falling under this category already required to be offered under a separate tab or different website/platform, following the manner prescribed for SEBI-registered stock brokers in GIFT-IFSC. The circular highlights that such products be "clearly labelled as international or overseas instruments, to prevent confusion with domestic debt securities" and offered in compliance with applicable FEMA guidelines.
Under the new framework, OBPPs will have to specify the grievance redressal mechanism applicable to investors for IFSCA-regulated products, ensuring transparency and investor protection. As reported by SocialNews.XYZ, ET Now, The Economic Times, and The Times of India, these products will continue to be governed by the regulations of their respective financial regulators. The revised rules further allow regulated financial products to be displayed either through a separate section on an OBPP's bond platform or via another dedicated website or platform operated by the provider. Clause 5.2.5 products must now include a specified grievance redressal mechanism on the platform for every category offered. For 54EC/Section 85 bonds, OBPPs must build in the mandatory tax-instrument disclaimer and the SEBI-does-not-handle-grievances disclosure, as the issuer, not SEBI, handles investor grievances for these instruments. Platforms offering tax-saving bonds under Section 54EC must disclose key features including the lock-in period and applicable investment limits, while Clause 5.2.6 specifically requires platforms to clarify that grievance redressal for these bonds rests with the issuer and not with SEBI. According to The Economic Times, platforms must prominently disclose that investment in these instruments is intended for investors seeking to avail themselves of the associated tax benefits, subject to the eligibility criteria and other conditions prescribed under the applicable provisions of the Income-tax Act.
Sebi has modified the compliance requirements for OBPPs under the revised framework. According to the regulator's latest circular, an OBPP must appoint a compliance officer as per the SEBI (Stock Brokers) Regulations, 2026, with the compliance officer required to meet the certification requirements, including the NISM-Series-III-A: Securities Intermediaries Compliance (Non-Fund) Certification Examination for stock brokers, as prescribed from time to time. This replaces the mandatory Company Secretary requirement that previously existed. The compliance officer must review their current credentials against the SEBI (Stock Brokers) Regulations, 2026 and confirm (or obtain) the NISM-Series-III-A certification. Additionally, platforms offering tax-saving bonds under Section 54EC must provide a disclaimer stating that these are tax-specific instruments and that grievance redressal for these instruments does not lie with SEBI but with the issuer. The change is meaningful for smaller platforms as it widens the talent pool and could lower compliance costs.
