1 week ago
SEBI Proposes Stricter Bond Advertisements to Protect Investors
SEBI wants online bond platforms to make their advertisements clearer and less confusing.
Some platforms have used social media, influencers and urgent messages to encourage people to invest quickly.
The proposed rules would require advertisements to show important details about each bond.
These details include who issued it, how long it lasts, its price, expected yield and credit rating.
Platforms could use phrases such as “fixed returns,” but they could not make those returns sound guaranteed.
Every advertisement would need a warning that debt investments can face market, credit and default risks.
Words such as “high yield” and “high returns” would be banned because they may mislead investors.
People and market participants could send feedback on the proposal until September 11.
SEBI proposed a specialised advertising code for online bond platform providers amid concerns about misleading promotions.
Advertisements would have to disclose issuer, tenor, security type, prices, yield, credit risk and rating details.
Terms such as “fixed returns” would be allowed only in generic, non-promissory language with calculation methods and risk disclosures.
The draft would ban phrases including “high yield,” “high rated” and “high returns,” as well as celebrity endorsements.
SEBI invited public comments on the draft through its web-based portal until September 11.
- Who
- The Securities and Exchange Board of India (SEBI), online bond platform providers (OBPPs), investors and market participants.
- What
- SEBI proposed a specialised advertising code governing promotions for debt securities on online bond platforms.
- Where
- The comments can be submitted through SEBI’s web-based public comment portal, while the rules would apply to OBPP promotional materials.
- When
- Public comments are invited until September 11; the article does not specify the year.
- Why
- SEBI said some marketing uses urgency-driven tactics and misleading terminology that may lead investors to commit money without adequate due diligence.
Key facts
- Regulator
- Securities and Exchange Board of India (SEBI)
- Affected platforms
- Online Bond Platform Providers (OBPPs)
- Required disclosures
- Issuer name, tenor, secured or unsecured status, clean price, dirty price, YTM, Credit Risk-o-meter and credit-rating details
- Standard warning
- “Fixed returns are not guaranteed returns. Investments in debt securities are subject to market, credit and default risks. Read all offer related documents carefully.”
- Minimum warning size
- At least 10-point font in promotional material
- Banned promotional language
- “High yield,” “high rated,” “high returns” and ungrounded synonyms
- Feedback deadline
- September 11
Quotes
SEBI
India’s securities market regulator that proposed the advertising framework
“Fixed returns are not guaranteed returns. Investments in debt securities are subject to market, credit and default risks. Read all offer related documents carefully.”
businesstoday.in
“Principal Protected Market Linked Debentures do not offer fixed or assured returns. Payouts depend on the underlying benchmark performance.”
businesstoday.in
Sources
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