Sebi Warns Against Unregistered Debt Platforms

Sebi cautions investors against using unregistered online platforms for unlisted debt securities, which lack regulatory oversight and protection. These platforms violate regulations by offering securities to over 200 investors, making them public issues. Sebi advises using registered platforms by authorized stockbrokers to ensure investor safety.

The Securities and Exchange Board of India (Sebi) issued a warning to investors on Thursday regarding the use of unregistered online platforms that deal in unlisted debt securities. These platforms lack regulatory oversight, adequate investor protection, and grievance redress systems, Sebi stated.

Highlighting regulatory concerns, Sebi explained that offering unlisted securities to more than 200 investors constitutes a 'deemed public issue,' violating the Companies Act, 2013, and Sebi regulations. The regulator has issued interim orders against several entities involved in such practices, emphasizing the associated risks.

Sebi urged investors to engage only with registered platforms managed by authorized stockbrokers on BSE and NSE for transactions in listed debt securities. The public can access a list of authorized online bond platform providers on Sebi's website. Unregistered platform disputes won't be addressed through Sebi or exchange mechanisms, prompting Sebi to request reports on such platforms via its Market Intelligence portal.

(With inputs from agencies.)