The Securities and Exchange Board of India (Sebi) is planning to tighten and standardise advertising guidelines for online bond platform providers (OBPPs), people close to the development told FE. The proposed framework will impose stricter rules on promotional content to enhance investor protection and ensure greater transparency in communication.
The move comes amid growing retail participation in bonds, driven partly by subdued equity market performance this year. Several platforms have been promoting low-rated bonds by highlighting higher returns without adequately disclosing the associated risks, potentially creating a misleading impression among investors.
Under the proposed norms, Sebi plans to prohibit any communication that promises guaranteed returns. Advertisements must not suggest that a security is risk-free, insulated from market volatility, or capable of providing assured returns. Platforms will also be required to clearly disclose all relevant risks.
While OBPPs may continue to use terms such as “fixed returns”, they will have to carry disclaimers clarifying that such returns are not guaranteed.
An email sent to Sebi seeking comments remained unanswered till the time of publication.
The regulator also plans to require platforms to submit advertisements issued by them, after prior approval from the OBPP Association, on a quarterly basis.
Last year, Sebi and stock exchanges cautioned investors about the risks and complexities associated with fixed-income securities.
The regulator’s concerns over mis-selling and unregistered platforms were highlighted in a November 2025 communication, where it noted that certain entities, including fintech firms and stock brokers, were offering OBPP services without obtaining registration from stock exchanges. Investors were advised to transact only through registered platforms and verify registration status.
Earlier, in July 2025, stock exchanges issued a joint advisory warning investors about risks associated with bond trading. They advised investors to evaluate factors such as credit ratings, issuer credibility, liquidity, settlement processes and tax implications, while ensuring transactions were carried out only through registered OBPPs.
“The revised advertising rules are designed to prioritise investor protection and prevent misleading communication. They also aim to create a fair and level playing field for all participants,” a source said.
At a recent event, Sebi Chairman Tuhin Kanta Pandey highlighted the need to improve public awareness about debt products and said the regulator plans to launch investor awareness campaigns.
“Retail participation will not grow merely because products are available. It will grow when products are understood. Bonds have their own vocabulary — coupon, yield, duration, rating and different types of risks. We must make this vocabulary investor-friendly,” Pandey said.
Separately, Sebi is also working on introducing a distribution framework for fixed-income products, aimed at strengthening safeguards and reducing instances of mis-selling.