Why in News?
The Securities and Exchange Board of India (SEBI) has recently proposed an advertisement code for Online Bond Platform Providers (OBPPs). The proposal aims to increase the reach of bond investment platforms and strengthen investor awareness about bonds as an asset class.
What is an Online Bond Platform Provider?
An Online Bond Platform Provider (OBPP) is a SEBI-registered platform that facilitates the buying and selling of bonds. It acts as a digital bridge between bond issuers, such as corporations or the government, and retail investors.
OBPPs use technology to simplify the bond investment process and make it more accessible and efficient for non-institutional investors. They provide an online ecosystem where investors can access comprehensive information about different bonds.
Investors can browse various bonds and examine important features such as credit ratings, interest rates, maturities and offer documents. They can also compare different bonds and assess their risk-return profiles, helping them make informed investment decisions.
Key Benefits of OBPPs
Low Ticket Size
OBPPs allow investors to access bonds with a minimum investment value of ₹10,000, making the asset class more accessible to retail investors.
Built-in Compliance
OBPPs are required to be registered stockbrokers and must comply with the relevant SEBI regulations, including the SEBI (Issue and Listing of Non-Convertible Securities) Regulations.
Instant Discovery
Investors can quickly filter and compare bonds based on parameters such as credit rating, yield and maturity.
How Does an OBPP Work?
An OBPP brings together bond discovery, order execution and settlement through a regulated digital platform.
An investor first needs to open a Demat account and complete the required KYC formalities. After onboarding, the investor can browse available listed bonds and compare details such as yield, maturity, credit rating and issuer profile.
Once the investor selects a bond, an order can be placed through the platform. For listed debt securities, orders are routed through the Request for Quote (RFQ) platform of a recognised stock exchange.
After the transaction is executed, settlement takes place through the recognised clearing corporation, following which the bonds are credited to the investor's Demat account.
Thus, OBPPs provide a transparent and trackable investment process while connecting retail investors with the formal securities market ecosystem.
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We provide offline, online and recorded lectures in the same amount.
Every aspirant is unique and the mentoring is customised according to the strengths and weaknesses of the aspirant.
In every Lecture. Director Sir will provide conceptual understanding with around 800 Mindmaps.
We provide you the best and Comprehensive content which comes directly or indirectly in UPSC Exam.
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