SEBI proposed advertising regulations for online bonds

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 initiative seeks to protect retail investors from misleading promotional practices, particularly those driven by digital, social media, and influencer-led marketing.

The proposed framework aims to curb the use of behavioral prompts, urgency, or ‘fear-of-missing-out’ (FOMO) messaging. SEBI intends to regulate specific terminology, such as ‘fixed returns’, ‘predictable returns’, ‘passive income’, and ‘high yield’, to prevent the false impression of guaranteed returns. Advertisements using the term ‘fixed returns’ would be required to carry a prominent disclaimer stating that returns are not guaranteed and that debt securities involve market, credit, and default risks.

To increase transparency, the regulator proposed mandatory standardized disclosures for specific securities. These disclosures would include the issuer, tenor, credit rating, nature of the security, clean and dirty prices, yield to maturity, and a Credit Risk-o-meter. Stakeholders have been invited to submit comments on the proposal until September 11, 2026.