Capital markets regulator SEBI on Tuesday extended the timetable by three weeks for entities, which act as online bond platform providers, to apply for registration as stockbrokers.
The Securities and Exchange Board of India (SEBI) said in a prospectus that the extension was granted keeping in mind the technical difficulties faced by these entities.
“It was decided to grant an additional period of time of three weeks starting from February 9, 2023 (end of three months from November 9, 2022) to apply for a certificate of registration as a Stock Broker under the SEBI (Stock Brokers) Regulations.”
Accordingly, the application for registration by Online Bond Platform Providers (OBPPs) as stock brokers will be submitted by March 1, 2023.
Under the November regulatory framework, Online Bond Platform Providers (OBPPs) must be companies registered in India and must register themselves as stockbrokers in the debt segment of the stock exchange.
Prior to that, the Capital Markets Supervisory Authority notified a framework for entities operating or wishing to operate as OBPP projects.
Over the past few years, there has been an increase in the number of OBPPs offering debt securities to non-institutional investors. Most of them are financial technology companies or backed by stockbrokers.
There has been a significant increase in the number of registered users who have transacted through OBPs.
While OBPs provide a way for investors, particularly non-institutional investors to access the bond market, their operations have been outside the scope of SEBI’s regulatory scope, the regulator noted.
After obtaining the registration as a securities broker in the debt segment of an exchange, the entity is required to apply to the exchange to act as an OBPP.
In its implementation, the entity needs to ensure compliance with roles, obligations, technology and framework – access and engagement, know your customer (KYC) to onboard investors and sellers and profiling investors’ risks.
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