SEBI opens online bond platforms to IFSCA products, 54EC bonds

Securities and Exchange Board of India (Sebi) has expanded the range of products that can be offered by online bond platforms, allowing them to offer products regulated by the International Financial Services Centres Authority (IFSCA) and specified tax-saving bonds under Section 54EC. The changes are aimed at widening product access for investors and easing compliance requirements for Online Bond Platform Providers (OBPPs). The revised framework takes effect immediately.

Under the new framework, OBPPs can offer products, securities and services regulated by financial sector regulators, including SEBI, the Reserve Bank of India, the Insurance Regulatory and Development Authority of India, IFSCA and the Pension Fund Regulatory and Development Authority. This expands the range of products that investors can access through online bond platforms.

For IFSCA-regulated products, platforms will have to follow the requirements applicable to SEBI-registered stock brokers operating in GIFT-IFSC. They will also have to comply with requirements under the Foreign Exchange Management Act, including rules governing overseas investments and limits under the Liberalised Remittance Scheme.

SEBI has also allowed OBPPs to offer bonds issued under Section 54EC of the Income Tax Act, 1961, or Section 85 of the Income-tax Act, 2025. These are tax-specific bonds that can provide eligible investors a deduction against certain capital gains, subject to applicable conditions and investment limits.

SEBI said such products must be clearly labelled as “international” or “overseas instruments” to distinguish them from domestic debt securities. Platforms must also specify the applicable grievance redressal mechanism.

For 54EC bonds, platforms will have to disclose details including the eligible issuers, lock-in period, investment limits, non-transferability, tax benefits and application size. They must also carry a disclaimer that these are tax-specific instruments and that investor grievances relating to them will be handled by the issuer rather than SEBI.

The regulator has also changed the compliance officer requirement for OBPPs. The earlier requirement to appoint a Company Secretary as compliance officer has been replaced. Platforms must now appoint a compliance officer in accordance with the SEBI Stock Brokers Regulations, 2026, who must meet the prescribed NISM-Series-III-A certification requirement.

SEBI said the changes were introduced following stakeholder suggestions and are intended to “promote ease of doing business.”