1 week ago
SEBI Proposes Distributor Model to Expand Corporate Bond Access
SEBI wants more people outside big cities to be able to invest in corporate bonds.
It has proposed special distributors called Fixed Income Corporate Product distributors.
These distributors could help people complete paperwork and place trades through online bond platforms.
They would not be allowed to hold customers’ money or securities.
They also could not sell certain unsecured perpetual bonds.
The distributors would earn commissions from the online platforms, not direct fees from customers.
The online platforms would be responsible for supervising them.
SEBI is asking the public and market participants for feedback before deciding on the framework.
SEBI has proposed Fixed Income Corporate Product distributors to expand retail access to corporate bonds beyond Tier I cities.
The proposed distributors would be enlisted with stock exchanges and appointed by Online Bond Platform Providers to serve Tier II, Tier III, and rural regions.
Corporate bond issuances reached ₹9.1 lakh crore in FY26, but participation remains concentrated among institutional investors.
Eligible applicants must be at least 18, have completed Class 12, and hold NISM-Series Fixed Income Securities Certification.
The public and market participants can submit comments on the proposal until September 11.
- Who
- The Securities and Exchange Board of India, Online Bond Platform Providers, proposed Fixed Income Corporate Product distributors, and retail investors.
- What
- SEBI proposed a distributor framework to expand retail participation in permitted corporate and other fixed-income securities.
- Where
- The framework is intended especially for Tier II, Tier III, and rural regions beyond Tier I cities.
- When
- The consultation is open for comments until September 11; proposed enlistment would be valid for three years.
- Why
- To address the limited reach of the corporate bond market among retail investors outside major urban centers.
Key facts
- Corporate bond issuance
- ₹9.1 lakh crore in FY26, nearly twice the capital raised through equity.
- RFQ trading growth
- Request for Quote trades through Online Bond Platform Providers rose 546% year-on-year.
- Proposed distributor name
- Fixed Income Corporate Product distributors.
- Eligibility
- Applicants must be at least 18, have a 12th-standard qualification, and hold NISM-Series Fixed Income Securities Certification.
- Enlistment period
- Stock-exchange enlistment would remain valid for three years, subject to renewal.
- Client fee cap
- The overall fee or brokerage charged by Online Bond Platform Providers would be capped at 2.5% of the investment value.
- Public consultation
- Comments from market participants and the public are invited until September 11.
Quotes
Securities and Exchange Board of India (SEBI)
India's securities market regulator, which issued the consultation paper
“The Mutual Fund Distributor (MFD) model has played an important role in increasing investor awareness and penetration of access to mutual fund products, particularly in Tier 2 and Tier 3 cities”
businesstoday.in
Sources
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