SEBI Allows Online Bond Platforms to Offer GIFT-IFSC-Regulated Bonds
The Securities and Exchange Board of India (SEBI) has widened what online bond platform providers (OBPPs) can offer. OBPPs may now list products regulated by the International Financial Services Centres Authority (IFSCA) in GIFT City, along with tax-saving capital gains bonds, subject to separate presentation and clear disclosures. SEBI has also relaxed the rule on who can act as an OBPP's compliance officer.
The changes come from SEBI Circular No. HO/17/11/(2)2026-DDHS-POD1/I/18769/2026 dated 14 August 2026, titled "Modification in the regulatory framework for Online Bond Platform Providers (OBPPs) including measures for promoting ease of doing business". It is addressed to OBPPs, recognised stock exchanges and stock brokers, amends the Master Circular for non-convertible securities dated 15 October 2025, and came into force immediately.
Background
OBPPs have been regulated since SEBI's notification of 9 November 2022, which inserted Regulation 51A into the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021. Their permitted product list is in clause 5.2 of the Master Circular. The August 2026 circular adds two new items to that list.
What OBPPs can now offer
| New clause | Product | Main conditions |
|---|---|---|
| 5.2.5 | Other products, securities or services regulated by a financial sector regulator, namely SEBI, RBI, IRDAI, IFSCA or PFRDA | For IFSCA-regulated products: a separate tab or distinct platform, labelled as international or overseas instruments; compliance with the directions of the relevant regulator and SEBI's stock broker requirements for GIFT-IFSC entities; compliance with FEMA, 1999, including the Overseas Investment Rules and Liberalised Remittance Scheme (LRS) limits; grievance redressal mechanism to be specified |
| 5.2.6 | Bonds issued under section 54EC of the Income-tax Act, 1961 or section 85 of the Income-tax Act, 2025 | Separate offering or tab; disclaimer that grievance redressal lies with the issuer, not SEBI; disclosure of eligible issuers, lock-in, investment limits, non-transferability, tax features, application size and exemption from SEBI listing requirements |
GIFT-IFSC bonds on OBPPs
The IFSCA route lets an Indian OBPP present bonds regulated in GIFT-IFSC to its users, but the circular keeps these products distinct from domestic bonds. They must sit on a separate tab or platform and be labelled as international or overseas instruments. For a resident investor, the purchase is an overseas investment, so FEMA rules and the LRS limit apply. Advisers should therefore treat each GIFT-IFSC bond as an overseas instrument governed by its own offer documents and by IFSCA, even when it appears on the same app as domestic bonds.
Tax-saving bonds
Bonds eligible for capital gains exemption under section 54EC of the 1961 Act, now section 85 of the Income-tax Act, 2025, can be offered too. The platform must state prominently that these bonds are meant for investors seeking the associated tax benefit, subject to meeting the eligibility conditions. It must also disclose lock-in, investment limits and non-transferability, and must tell investors that complaints go to the issuer, not SEBI. For CAs advising clients who plan to claim this exemption, the bonds may now be bought through an OBPP, but checking eligibility under the Income-tax Act remains the adviser's job.
Compliance officer rule relaxed
Earlier, clause 1.1 of Annexure XXIA required an OBPP to have a Company Secretary as compliance officer. The circular replaces this: the compliance officer must be appointed under the SEBI (Stock Brokers) Regulations, 2026 and must hold the NISM Series III-A Securities Intermediaries Compliance (Non-Fund) certification.
What platforms and advisers should do
- OBPPs adding IFSCA products should build a separate section, add the "international or overseas" label, check LRS and FEMA compliance and publish the grievance route.
- OBPPs adding 54EC or section 85 bonds should publish the disclaimer and the full set of product disclosures before listing them.
- Review the compliance officer appointment against the new NISM Series III-A requirement.
- Stock exchanges must put systems in place, amend their bye-laws and inform brokers, so platforms should watch for exchange circulars on implementation.
- Investors and advisers should read the instrument's own offer terms; availability on a SEBI-registered OBPP does not mean SEBI regulates the bond itself.
Updated on 27 September 2026: linked SEBI's circular of 14 August 2026, added the circular number, the new clauses 5.2.5 and 5.2.6 with their conditions, the tax-saving bond route and the compliance officer change.
