SEBI proposed expanding Online Bond Platform Providers (OBPPs) scope to offer IFSCA-regulated products and tax-saving bonds under Section 54EC of Income Tax Act. Currently restricted to domestic securities, platforms may access GIFT-IFSC products under FEMA compliance. Proposal includes 54EC bonds from REC, Power Finance Corporation, Indian Railways Finance Corporation offering capital gains tax exemptions. Compliance officer requirements align with stockbroker regulations. Public feedback deadline: May 26.

This proposal represents SEBI's strategic move to integrate domestic and international financial services. OBPPs currently operate in silos, unable to offer GIFT-IFSC products or tax-efficient bonds, limiting investor choices. The IFSCA integration allows platforms to bridge onshore-offshore investing within LRS limits, enhancing India's position as a financial hub. Tax-saving bonds under 54EC provide capital gains deferral but with mandatory lock-in periods and non-transferability constraints. The compliance officer flexibility addresses industry feedback about rigid company secretary requirements, aligning with standard stockbroker norms. This democratizes bond investing by bringing institutional-grade products to retail platforms while maintaining investor protection through mandatory disclosures and grievance redressal clarity. The move supports government's digital finance agenda and GIFT City development. However, platforms must navigate FEMA complexities and educate investors about lock-in risks. This expansion could significantly increase bond market participation, especially among tax-conscious retail investors seeking capital gains optimization.