SEBI expands online bond platforms to offer GIFT City IFSC products
Synopsis
SEBI has quietly redrawn the map for India's online bond platforms — OBPPs can now offer GIFT City IFSC products, tax-saving bonds under Section 54EC and the new Income-tax Act 2025, and instruments governed by RBI, IRDAI, and PFRDA. It is the most significant expansion of the OBPP product universe since the framework was introduced in 2022, and it opens a regulated cross-border fixed-income corridor for Indian retail investors.
Key Takeaways
SEBI on 14 August expanded the product scope of online bond platform providers (OBPPs) to include GIFT City IFSC securities regulated by IFSCA .
OBPPs can now offer products governed by SEBI, RBI, IRDAI, PFRDA, and IFSCA — a multi-regulator product universe.
Tax-saving bonds under Section 54EC (Income-tax Act, 1961) and Section 85 (Income-tax Act, 2025) are now permitted on these platforms.
IFSCA-regulated products must comply with FEMA rules and Liberalised Remittance Scheme (LRS) limits, and must be clearly labelled as international instruments.
OBPPs must disclose a grievance redressal mechanism for each product category to protect investors.
The Securities and Exchange Board of India (SEBI) on Friday, 14 August expanded the scope of products that online bond platform providers (OBPPs) can offer, permitting them to list securities and investment products regulated by the International Financial Services Centres Authority (IFSCA) in GIFT City. The move is designed to ease business operations and broaden the investment options available to retail and institutional investors through digital bond platforms.
What the Revised Framework Covers
Under the updated regulatory structure, OBPPs are now authorised to offer products and securities governed by multiple financial sector regulators — SEBI, the Reserve Bank of India (RBI), the Insurance Regulatory and Development Authority of India (IRDAI), the Pension Fund Regulatory and Development Authority (PFRDA), and IFSCA. This multi-regulator approach marks a significant widening of the product universe available on bond platforms.
SEBI has also cleared the offering of specified tax-saving bonds issued under Section 54EC of the Income-tax Act, 1961, and Section 85 of the Income-tax Act, 2025, through these platforms — giving investors a tax-efficient fixed-income route via digital channels.
GIFT-IFSC Compliance Requirements
Products and services regulated by IFSCA must be offered in accordance with the framework applicable to SEBI-registered stock brokers operating within GIFT-IFSC. Offerings will additionally need to comply with Foreign Exchange Management Act (FEMA) regulations, including overseas investment rules and limits prescribed under the Liberalised Remittance Scheme (LRS).
To prevent investor confusion between domestic and overseas instruments, SEBI has mandated that all IFSCA-regulated products be clearly labelled as international or overseas instruments on the respective platforms. This labelling requirement is a direct consumer-protection measure aimed at reducing mis-selling risk.
Display and Grievance Redressal Rules
The revised rules permit regulated financial products to be displayed either through a dedicated section on an existing OBPP bond platform or via a separate website or platform operated by the same provider. All such products will continue to be governed by the regulations of their respective financial regulators.
Critically, OBPPs will be required to clearly specify the grievance redressal mechanism applicable to investors for each product category, reinforcing transparency and investor protection standards.
Why This Matters for India's Bond Market
This comes amid SEBI's broader push to deepen India's corporate bond market and position GIFT City as a competitive international financial hub. Online bond platforms have grown rapidly since SEBI first regulated them in 2022, but their product scope had remained largely limited to domestic debt securities. Allowing IFSC-linked products opens a cross-border investment corridor for Indian retail investors operating within LRS limits — a first of its kind through regulated digital bond infrastructure.
With global fixed-income yields remaining elevated, the timing gives Indian investors regulated access to international debt instruments without going through traditional offshore channels. The next step will be how quickly OBPPs build out compliant product shelves under the new framework.
Point of View
Digital pathway to international fixed-income products within the GIFT-IFSC corridor, without routing through offshore brokers. The LRS compliance overlay is sensible, but the real test is execution: OBPPs are still nascent platforms and building FEMA-compliant international product shelves demands compliance bandwidth most of them do not yet have. The labelling mandate is a positive consumer-protection step, but grievance redressal across multiple regulators — SEBI, IFSCA, RBI — could become a jurisdictional maze for retail investors if not harmonised. SEBI would do well to publish a unified investor charter before the first IFSC product goes live on these platforms.
NationPress
14 Aug 2026
Frequently Asked Questions
What has SEBI changed for online bond platforms?
SEBI has expanded the product scope of online bond platform providers (OBPPs) to allow them to offer securities and investment products regulated by IFSCA in GIFT City, in addition to domestic instruments. The revised framework also permits tax-saving bonds under Section 54EC and multi-regulator products from RBI, IRDAI, and PFRDA.
What is GIFT City IFSC and why does it matter for bond investors?
GIFT City IFSC (International Financial Services Centre) is India's dedicated offshore financial hub in Gujarat, regulated by IFSCA. Its inclusion on bond platforms gives Indian retail investors regulated digital access to international fixed-income instruments within Liberalised Remittance Scheme limits — a new cross-border investment corridor.
Which tax-saving bonds can now be offered on online bond platforms?
SEBI has approved the offering of specified tax-saving bonds issued under Section 54EC of the Income-tax Act, 1961, and Section 85 of the Income-tax Act, 2025, through OBPPs. These bonds provide capital gains tax exemption benefits to investors.
What compliance rules apply to IFSCA products on bond platforms?
IFSCA-regulated products must follow the framework for SEBI-registered stock brokers in GIFT-IFSC, comply with FEMA regulations and LRS limits, and be clearly labelled as international or overseas instruments. Platforms must also specify a grievance redressal mechanism for each product category.
How can OBPPs display international products under the new rules?
OBPPs can display IFSCA-regulated and other multi-regulator products either through a dedicated section on their existing bond platform or via a separate website or platform operated by the same provider, as long as all regulatory and labelling requirements are met.
