In two consultation papers released on Friday, the capital markets regulator proposed the creation of a “fixed income channel partner” (FICP) ecosystem and a stricter advertising code for online bond platform providers (OBPPs).
Under the proposed framework, individuals and entities enlisted with recognised stock exchanges would be allowed to assist OBPPs in distributing and facilitating transactions in permitted fixed-income securities. Eligible applicants could seek enlistment either directly with stock exchanges or through an online bond platform provider.
SEBI said exchanges would maintain and publish details of enlisted channel partners on their websites and share the information among themselves to ensure regulatory oversight.
The regulator has proposed that mutual fund distributors registered with the Association of Mutual Funds in India (AMFI) be allowed to enroll as fixed income channel partners without paying enlistment fees, provided they clear the relevant National Institute of Securities Markets (NISM) certification requirements.
Channel partner registrations would remain valid for three years and could be renewed through an application submitted at least 30 days before expiry, subject to meeting eligibility conditions. Stock exchanges would determine nominal enlistment and renewal charges, broadly aligned with fees currently applicable to mutual fund distributors.
As part of the framework, channel partners would be required to adhere to a common code of conduct prescribed by stock exchanges. Applicants would need to furnish details such as office address, contact information, and particulars of directors, partners, promoters and their Permanent Account Numbers (PANs). Similar information would also have to be shared with the online bond platform provider at the time of appointment and updated whenever changes occur.
In a separate consultation paper, SEBI proposed a tighter advertising regime for online bond platforms, citing increased use of digital marketing, social media campaigns and influencer-led promotions.
The regulator said marketing material should not use tactics that create a false sense of urgency, scarcity or fear of missing out that could pressure investors into making rushed investment decisions.
For advertisements promoting specific debt securities, SEBI has proposed mandatory disclosures, including the issuer’s name, instrument tenor, credit rating and any rating changes, credit risk-o-meter details, security status, pricing information and yield-to-maturity data.
The regulator has also suggested permitting terms such as “fixed returns”, “predictable returns” and “passive income” in promotional material, provided they are accompanied by appropriate disclaimers and do not imply assured returns.
All advertisements would be required to carry a standard risk warning stating that fixed returns are not guaranteed and that investments in debt instruments are exposed to market, credit and default risks.
SEBI also proposed prohibiting broad promotional claims such as “high yield”, “high rated” and “high returns” unless backed by verifiable data and adequate context.
The regulator has invited public comments on both proposals until September 11.
