CIRCULAR
SEBI/HO/DDHS/POD1/P/CIR/2023/194
December 28, 2023
To
Entities operating as Online Bond Platform Providers;
Recognised Stock Exchanges and Clearing Corporations; and
Stock Brokers
Madam/ Sir,
Sub: Modifications to provisions of Chapter XXI of NCS Master Circular1 dealing
with registration and regulatory framework for Online Bond Platform
Providers (OBPPs)
1. Chapter XXI of the NCS Master Circular specifies the provisions for registration
and regulatory framework for OBPPs. Representations have been received from
Stock Exchanges and market participants including online bond platforms seeking
relaxations from certain provisions of the said chapter. The proposed
modifications shall aid in ease of doing business for OBPPs.
2. In light of the above, the following provisions stand modified as under:
2.1 Clause 5.2 of the NCS Master Circular is substituted and shall read as under:
“An entity acting as an Online Bond Platform Provider shall offer only the
following products or securities or services on its Online Bond Platform:
5.2.1. Listed debt securities, listed municipal debt securities and listed
securitised debt instruments;
1 Master Circular for issue and listing of Non-convertible Securities, Securitised Debt Instruments,
Security Receipts, Municipal Debt Securities and Commercial Paper dated July 07, 2023
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5.2.2. Debt securities, municipal debt securities and securitised debt
instruments proposed to be listed through a public offering;
5.2.3. Listed Government Securities, State Development Loans and Treasury
Bills;
5.2.4. Listed Sovereign Gold Bonds; and
5.2.5. Other products or securities or services that are regulated by a financial
sector regulator viz. SEBI, RBI, IRDAI or PFRDA.
In case of the products or securities or services mentioned at 5.2.5
above,
a. they may be offered by the entity either under a different tab on its
online bond platform or on any other website/ platform.
b. they will be governed by the directions/ stipulations of the respective
financial sector regulator.”
2.2 Clause 5.3.4 of the NCS Master Circular is substituted and shall read as under:
“It is also reiterated that an entity acting as an Online Bond Platform Provider
shall divest itself of offerings of other products or securities or services which
are not permitted under the clause 5.2 of this Chapter.”
2.3 Clause 5.3.7 of the NCS Master Circular is substituted and shall read as under:
“If the online bond platform or any other platform/ website of the Online Bond
Platform Provider has any link/ tab to websites/ platforms offering products or
securities or services that are regulated by other financial sector regulators viz.
RBI, IRDAI, or PFRDA, then once a user clicks on such tab/ link, the following
disclaimer shall be displayed at all times in legible font:
“<Name of the product> is regulated by <RBI/ IRDAI/ PFRDA>”
In case the Online Bond Platform Provider offers products or securities or
services that are regulated by SEBI on its online bond platform or any other
platform/ website, the relevant SEBI regulations as applicable to the product /
security / service shall apply.”
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2.4 Clause 3.2 of Annex-XXI-A of the NCS Master Circular is substituted and shall
read as under:
“Agreement with sellers of products or securities or services as specified
in clause 5.2.1 to 5.2.4 of this Chapter: Where the entity allows third party
sellers of products or securities or services as specified in clause 5.2.1 to 5.2.4
of this Chapter, to use the OBP to sell such products or securities or provide
such services, the entity shall, before taking up an assignment of offering of
such products or securities or services on its OBP, enter into an agreement in
writing with such sellers that clearly defines the inter-se relationship and sets
out their mutual rights, liabilities and obligations relating to such assignments.”
2.5 Insertion of clause 3.4.4 of Annex-XXI-A of the NCS Master Circular
“All Orders with respect to securities as specified in clause 5.2.5 of this Chapter
shall be as per the applicable laws and regulations of the respective financial
sector regulators.”
2.6 Clause 3.6 of Annex-XXI-A of the NCS Master Circular is substituted and shall
read as under:
“3.6 Issue of order receipt, deal sheet and quote receipt in case products
or securities or services as specified in clause 5.2.1 to 5.2.4 of this
Chapter:
3.6.1. Order receipt to investor on placement of order: The entity shall, on
placement of an order by an investor, shall issue without delay to the
investor, an electronic order receipt which shall, inter-alia, include date
and time of order, details of counter-parties involved, quantity and
amount proposed to be transacted, etc.
3.6.2. Deal Sheet to investor post execution of the order: The entity shall, upon
execution of the order, forthwith issue a deal sheet to the investor for all
transactions, stating all the relevant information regarding the
transaction which shall inter-alia include date and time of placing of the
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order, date and time of settlement of the order, details of counter-parties
involved, quantity and amount transacted, as may be applicable.
3.6.3. Quote receipt to seller post execution of the order: The entity, post
execution of order, in case of third party sale of debt products or
securities or services on the OBP, shall issue without delay to the seller,
a quote receipt which shall, inter-alia, include date and time of quote,
details of counter-parties involved, quantity and amount quoted, etc.”
2.7 Para 10 of Advertisement Code for OBPPs (Annex-XXI-C of the NCS Master
Circular) is substituted and shall read as under:
“All advertisements shall be accompanied by a standard warning in legible font
stating “Investments in debt securities/ municipal debt securities/ securitised
debt instruments are subject to risks including delay and/ or default in payment.
Read all the offer related documents carefully”. No addition or deletion of words
shall be made to the standard warning.”
3. In view of the modifications mentioned above, the Chapter XXI of the NCS Master
circular shall be modified accordingly.
4. Any Online Bond Platform Provider who fails to comply with the provisions of this
circular shall be liable for action specified under the SEBI Act and any rules,
regulations and circulars issued thereunder.
5. The Circular is issued in exercise of the powers conferred under Section 11(1) of
the Securities and Exchange Board of India Act, 1992 read with Regulation 55 (1)
of the SEBI (Issue and Listing of Non-convertible Securities) Regulations, 2021,
Regulation 29 of SEBI (Issue and Listing of Municipal Debt Securities)
Regulations, 2015 and Regulation 48 of SEBI (Issue and Listing of Securitised
Debt Instruments and Security Receipts) Regulations, 2008 to protect the interest
of investors in securities and to promote the development of, and to regulate the
securities market.
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6. This circular shall come into force with immediate effect.
7. The Stock Exchange(s) are directed to:
7.1 bring the provisions of this circular to the notice of Stock Brokers/ Online Bond
Platform Providers and also disseminate the same on their websites;
7.2 make necessary amendments to the relevant bye-laws, rules and regulations
for the implementation of the above directions in coordination with one another
to achieve uniformity in approach and communicate to SEBI; and
7.3 monitor the operations carried out by Online Bond Platform Providers.
8. This Circular is available at www.sebi.gov.in under the link “Legal Circulars”.
Yours faithfully,
Pradeep Ramakrishnan
General Manager
Department of Debt and Hybrid Securities
+91-22-26449246
pradeepr@sebi.gov.in
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