SEBI proposes stricter advertising rules for online bond platforms

The Securities and Exchange Board of India (SEBI) has issued a consultation paper proposing a revised advertisement code for Online Bond Platform Providers (OBPPs). The move aims to address the rise in digital, social media, and influencer-led promotions that may lead investors to make decisions without sufficient due diligence.

The proposed framework includes restrictions on advertisements that utilize urgency, fear-of-missing-out (FOMO) messaging, or behavioral prompts. To ensure transparency, OBPPs would be required to provide standardized disclosures for specific securities, including the issuer, tenor, credit rating, nature of the security, clean and dirty prices, yield to maturity (YTM), and a Credit Risk-o-meter.

SEBI also intends to regulate the use of terms such as ‘fixed returns’, ‘predictable returns’, and ‘passive income’ to prevent the false impression of guaranteed returns. Advertisements using ‘fixed returns’ must carry a prominent disclaimer stating that such returns are not guaranteed and that debt securities carry market, credit, and default risks. Additionally, the use of vague, unsubstantiated adjectives like ‘high yield’ or ‘high rated’ would be prohibited. Stakeholders have been invited to submit comments on the proposal by September 11, 2026.