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SEBI proposed regulatory framework for online bond markets

Published on July 22, 2022
Current Context: Capital market regulator SEBI(Securities and Exchange Board of India) proposed a regulatory framework for online bond selling markets that are selling listed debt securities.
SEBI proposed regulatory framework for online bond markets
  • According to the consultation paper, bond selling platforms have to register with SEBI as a stockbroker (debt segment) or run by SEBI registered brokers.
  • The stock broker regulations will apply to these entities, which helps to govern their code of conduct, aspects related to their operation, and risk management.
  • As per SEBI, only listed debt securities can be bought and sold through online bond platforms.
  • SEBI proposed that listed debt securities issued privately and sold on bond platforms should be locked in for a period of six months from the date of allotment of such debt securities by the issuer.
  • The transactions on online bond platforms should be routed through the trading platform of debt segments of exchanges or the RFQ (Request for Quote) platform of the stock exchanges, where the transactions will be cleared and settled on a Delivery Versus Payment (DVP-1)basis.
  • SEBI said registration of bond platforms as stock brokers will benefit both market and market participants as KYC (Know Your Customer) is needed when registering clients on bond platforms.
  • The net worth and deposit requirements for stock brokers will ensure the financial stability of the platform and this will provide confidence to investors.
  • Static Knowledge:
    • SEBI chairman - Madhabi Puri Buch
    • SEBI headquarters - Mumbai
    • SEBI was formed - on 12 April 1992

Question: 

Q.1 SEBI recently released a regulatory framework for online bond markets, the listed debt securities issued privately and sold on the bond platform should be locked for a period of ______ from the date of allotment of debt securities by issuer.
a. 6 months
b. 10 months
c. 12 months
d. 4 months
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