Sebi Proposes Expansion of Online Bond Platforms in GIFT City
Sebi proposes GIFT City access for online bond platforms
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The Securities and Exchange Board of India (Sebi) has proposed allowing online bond platform providers (OBPPs) to operate in the GIFT International Financial Services Centre (IFSC), enhancing their access to global debt markets. This initiative aims to align OBPP operations with stockbrokers and includes provisions for tax-saving bonds and compliance officer appointments.
- 01Sebi's proposal expands OBPP operations in GIFT City, enhancing access to global debt markets.
- 02OBPPs will be allowed to offer overseas-listed debt securities under IFSCA regulations.
- 03Tax-saving bonds under Section 54EC of the Income Tax Act may be offered by OBPPs.
- 04Compliance officer appointment norms for OBPPs will be eased to align with stockbroker rules.
- 05Feedback on the consultation paper is invited until May 26.
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The Securities and Exchange Board of India (Sebi) has proposed a significant expansion for online bond platform providers (OBPPs) by allowing them to operate within the GIFT International Financial Services Centre (IFSC) in Gandhinagar, Gujarat, India. This move follows a request from the International Financial Services Centres Authority (IFSCA) to enable OBPPs to offer overseas-listed debt securities, thereby broadening their access to global debt markets. Currently, while stockbrokers can operate in GIFT City through separate business units, OBPPs have not been explicitly permitted to offer IFSCA-regulated products. The proposal aims to align OBPP operations with those of stockbrokers, ensuring compliance with foreign exchange rules and investment limits under the Liberalised Remittance Scheme.
Additionally, Sebi has suggested that OBPPs should be allowed to offer tax-saving bonds under Section 54EC of the Income Tax Act, which are issued by government-backed entities and currently exempt from mandatory listing requirements. The proposal mandates that OBPPs disclose key features of these bonds, including eligible issuers and tax benefits. Furthermore, Sebi plans to ease the norms for appointing compliance officers for OBPPs, allowing broader eligibility criteria rather than restricting the role to company secretaries. The regulator has invited feedback on this consultation paper until May 26.
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This proposal could enhance investment opportunities for individuals and institutions by allowing access to global debt markets and tax-saving bonds through online platforms.
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