Business · India Bureau
Sebi tightens rules on online bond platform promotional claims
India's markets regulator has proposed stricter advertising standards for online bond platforms to prevent misleading marketing tactics. The move targets digital promotions, social media campaigns and influencer endorsements that may push retail investors into hasty decisions.
LSN India ·
The Securities and Exchange Board of India (Sebi) issued a consultation paper on Friday outlining revised advertisement codes designed to curb aggressive promotional practices by online bond platform providers (OBPPs). The proposals directly address the rapid expansion of digital marketing channels, including social media platforms and influencer-led campaigns, which have become prevalent in the bond distribution space.
Under the new framework, Sebi has prohibited advertisements employing urgency tactics, behavioural prompts, and fear-of-missing-out messaging that could compel investors to bypass proper due diligence. The regulator aims to establish a more measured approach to bond marketing that prioritises investor protection over rapid customer acquisition.
For securities-specific advertisements, OBPPs would be mandated to disclose standardised information including the issuer details, tenor, credit rating, security nature, clean and dirty prices, yield to maturity, and the Credit Risk-o-meter rating. The regulator has also proposed guidelines governing the use of terms such as "fixed returns" and similar claims that may misrepresent bond investment characteristics.
The consultation paper represents Sebi's effort to harmonise online bond platform marketing practices with established regulatory standards. Industry participants have been invited to submit feedback on the proposed measures, with the regulator expected to finalise guidelines following the public consultation period.