SEBI allows online bond platforms to offer GIFT City IFSC products
Mumbai, Aug 14
The Securities and Exchange Board of India on Friday expanded the scope of products that can be offered by online bond platform providers, allowing them to provide securities and investment products regulated by the International Financial Services Centres Authority in GIFT City.
The move is aimed at easing business operations and widening investment options available through online bond platforms.
Under the revised regulatory framework, OBPPs will now be permitted to offer products and securities regulated by various financial sector regulators, including SEBI, the Reserve Bank of India (RBI), the Insurance Regulatory and Development Authority of India (IRDAI), the Pension Fund Regulatory and Development Authority (PFRDA), and IFSCA.
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 market regulator said products, securities and services regulated by IFSCA must be offered in accordance with the framework applicable to Sebi-registered stock brokers operating in GIFT-IFSC.
Such offerings will also need to comply with Foreign Exchange Management Act (FEMA) regulations, including overseas investment rules and limits prescribed under the Liberalised Remittance Scheme (LRS).
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 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.
These products will continue to be governed by the regulations of their respective financial regulators.
Additionally, online bond platform providers will be required to clearly specify the grievance redressal mechanism applicable to investors for such products, ensuring transparency and investor protection.
— IANS
Reader Comments
This is a good move for diversification, but I hope SEBI ensures proper investor education. Many people don't understand the difference between domestic and international products, and the labelling requirement is a smart step. However, the LRS limits and FEMA compliance might still confuse the average investor. Hope they provide clear guidelines.
Great initiative! The 54EC tax-saving bonds via online platforms will be a game-changer for those looking for capital gains tax exemption. Previously, we had to go through traditional channels, which was cumbersome. This is a step towards modernising our bond markets. 🚀
While this is progressive, I wish SEBI had also addressed the grievance redressal mechanism more explicitly. The fact that products are regulated by different bodies like RBI and IRDAI means investors might face confusion about whom to approach if issues arise. Still, better late than never, right?
As an NRI, this is music to my ears! Finally, we can access GIFT City products from a single platform. The separate labelling for international instruments is a clever move to avoid any confusion. Looking forward to exploring new investment avenues. 😊
Interesting development from a global perspective. India's GIFT City is positioning itself as a serious IFSC, and this regulatory clarity will attract more international investors. The FEMA and LRS compliance requirements are quite stringent, but they show India's commitment to transparency. Good move, SEBI!
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