Sebi Cracks Down on Bond Platforms

19 Nov 2024 , 10:52 AM

After discovering that four online bond platform providers were operating without stock exchange registration, the Securities and Exchange Board of India (Sebi) ordered them to stop and desist from issuing securities for public subscription and for sale on their platforms.

These companies include Berkelium Technologies, which runs Stable Investments; Purple Petal Invest, which owns Tap Invest; and AI Growth and Texterity, which owns and runs altGraaf.

Regulations require companies that offer online bond platforms to be registered as stock brokers in a stock exchange’s debt section.

However, following routine surveillance, Sebi discovered that some unregistered internet platforms were soliciting and selling unlisted NCDs (non-convertible debentures) to individual investors.

It was discovered that as of October 23, 2024, these platforms were offering the public the opportunity to purchase unlisted NCDs that the issuers had privately placed. According to Sebi, this kind of downselling of privately placed unlisted NCDs to the general public has the makings of a public problem under the Companies Act.

According to regulations, a predetermined and restricted group of investors—no more than two hundred in a fiscal year—may be provided private placements.

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