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Registration and regulatory framework for Online Bond Platform Providers (OBPPs) - SEBI - SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2022/154

Extract

..... there is a need to place checks and balances in the form of transparency in operations and disclosures to the investors dealing with such OBPs, measures for mitigation of payment and settlement risk, availability of redress mechanism in case of complaints, etc. 4. Thus, in order to streamline the operations of these OBPs and to facilitate the participation of investors in the bond market, there was a need to provide a regulatory framework for the working of such OBPs. 5. Pursuant to discussions with market participants and stakeholders, vide notification dated November 09, 2022, a framework has been prescribed for entities operating/ desirous of operating as OBPPs under regulation 51A of the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (‘NCS Regulations’): 5.1. Such entity shall be a company incorporated in India and register itself as a stock broker in the debt segment of the Stock Exchange(s); 5.2. An entity acting as an OBPP on or prior to this circular coming into force, shall cease to offer products or services or securities on its OBP other than the following: 5.2.1. Listed debt securities and 5.2.2. Debt securities proposed to be liste .....

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Registration and regulatory framework for Online Bond Platform Providers (OBPPs) - SEBI

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..... kings are provided: 1. Roles and obligations: (a) The entity has appointed a Company Secretary as a compliance officer. (b) The entity has appointed at least two qualified key managerial personnel with experience of at least three years in the securities market; Explanation I. - For the purposes of this circular, “Key managerial personnel” shall have the same meaning as assigned to it in the Companies Act, 2013. Explanation II. - For the purposes of this circular, a person shall said to be ’qualified‘ if he/she possesses a professional qualification in finance, accountancy, law, engineering, company secretaryship or management from a university or an institution recognized by the Central Government or any State Government or a foreign university or post-graduation in the Securities Market from National Institute of Securities Markets (NISM) of a duration not less than one year. (c) The entity has obtained a SEBI Complaints Redress System (SCORES) authentication and has put in place a well-defined mechanism to address grievances that may arise or likely arise while carrying out OBP operations. 2. Technology: The entity undertakes / confirms the following: (a) .....

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Registration and regulatory framework for Online Bond Platform Providers (OBPPs) - SEBI

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..... s and verify the identity of its investors and sellers by requiring them to submit necessary documents undertaking necessary steps for this purpose. 3.4. Execution of orders: The entity shall ensure that: 3.4.1. All Orders with respect to listed debt securities placed on OBP are mandatorily routed through the Request for Quote platform (RFQ) of the recognised Stock Exchange(s) and settled through the respective Clearing Corporations. 3.4.2. All Orders with respect to debt securities proposed to be listed through a public offering placed on OBP shall be mandatorily routed and settled through the stock exchange mechanism. 3.5. Risk Profiling: The entity may, on its OBP, evaluate through a set of questionnaires with appropriate risk factors and disclaimers, the optimum level of investment risk an investor or seller is willing to take, taking into account multiple factors such as risk appetite, age, investment horizon, etc. 3.6. Issue of order receipt, deal sheet and quote receipt: (a) Order receipt to investor on placement of order: The entity shall, on placement of an order by an investor, shall issue without delay to the investor, an electronic order receipt which shall, inter-alia, .....

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Registration and regulatory framework for Online Bond Platform Providers (OBPPs) - SEBI

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..... he prevailing legal or regulatory requirements. 7.3. It shall, establish appropriate controls to reduce the likelihood of erroneous transactions such as fat-finger errors, unintended or uncontrolled trading activity by investors and sellers. 8. Handling exigencies: The entity undertakes to establish appropriate safeguards and procedures to deal with exigencies like suspension or cessation of trading in debt securities, cancellation of orders or transactions by the investors and sellers, malfunctions or erroneous use of its systems by investors and sellers, or other unforeseen situations. 9. Disclosure of conflict of interest: The entity undertakes to identify and disclose on its OBP, all instances of conflict of interest, if any, arising from its transactions or dealings with related parties. 10. Data integrity - Preservation, access and use of data: The entity undertakes to: (a) maintain all data relating to its activities in an easily retrievable media. (b) maintain confidentiality and security of all data relating to its activities and strictly control access to such data. 11. Reporting and disclosure requirements: 11.1. The entity shall, in addition to the information required .....

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Registration and regulatory framework for Online Bond Platform Providers (OBPPs) - SEBI

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