SEBI proposes stricter advertising rules for online bond platforms

The Securities and Exchange Board of India (SEBI) has proposed stricter advertising regulations for Online Bond Platform Providers (OBPPs) to protect retail investors from misleading promotional practices. The proposal, detailed in a consultation paper issued on August 21, aims to curb the use of digital, social media, and influencer-led marketing that may encourage hasty investment decisions.

Under the proposed code, platforms would be prohibited from using behavioral prompts, urgency, or ‘fear-of-missing-out’ (FOMO) messaging. SEBI also intends to tighten scrutiny on terms such as ‘fixed returns’, ‘predictable returns’, ‘passive income’, and ‘high yield’. Any advertisement using the term ‘fixed returns’ would be required to carry a prominent disclaimer clarifying that returns are not guaranteed and that debt securities involve market, credit, and default risks.

To ensure transparency, the regulator proposed standardizing the information included in advertisements for specific securities. This mandatory disclosure would include the issuer, tenor, credit rating, nature of the security, clean and dirty prices, yield to maturity, and a Credit Risk-o-meter. SEBI has invited public comments on these proposals until September 11, 2026.