The Securities and Exchange Board of India (Sebi) is planning to allow online bond platforms to offer debt securities that are regulated by the International Financial Services Centres Authority (IFSCA) in GIFT City to investors in India. This means that if the proposal is approved by the regulator, investors in India will be able to invest in foreign bonds listed on the bourses in the GIFT City located in Gandhinagar, Gujarat.
Proposal Details
The markets regulator is also planning to allow these bond platforms to offer tax-saving bonds issued by REC, PFC, IRFC, and other such government bodies to domestic investors. Sebi has issued a consultation paper on these proposed changes, and suggestions and comments can be sent to the regulator by May 26, as announced on Tuesday.
Background and Rationale
Sebi stated that IFSCA had requested it to allow online bond platforms to offer overseas-listed debt papers through a regulated framework in the international financial services centre (IFSC). Since these platforms are registered with Sebi as stock brokers in the debt segment of stock exchanges, there was a need to consider allowing them to offer products, securities, and services regulated by IFSCA.
This move is expected to broaden the investment options available to Indian investors, providing them with access to foreign debt securities and government-backed tax-saving bonds through a convenient online platform. The consultation paper invites feedback from stakeholders to ensure a well-regulated framework that protects investor interests while promoting market development.
If implemented, this initiative could enhance the depth of the bond market in India and align it with global standards, offering investors more diversified portfolio choices. The proposal underscores the regulator's commitment to fostering innovation and expanding access to financial products within a robust regulatory environment.
