# Sebi proposes bond distributor network, tighter ad rules to deepen retail participation — retained record

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source: [news](https://highsignal.app/data/news) (news:india-mint-markets)  published 2026-08-21 13:53 ingested 2026-08-22 06:37

[original source ↗](https://www.livemint.com/market/sebi-bond-distributor-network-ad-rules-retail-participation-mutual-fund-11787316933242.html)

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Mumbai: The Securities and Exchange Board of India (Sebi) has proposed a new network of fixed-income distributors to take online bond investing beyond big cities, alongside tighter advertising rules for online bond platforms to curb mis-selling and misleading claims.
In a consultation paper issued on Friday, the market regulator has proposed a framework for fixed-income channel partners (FICPs), who would help investors access fixed-income securities through online bond platform providers (OBPPs). The move comes as the regulator seeks to widen retail participation in corporate bonds, which remains concentrated relative to institutional participation.
The model draws on the experience of mutual fund distributors, who have helped expand mutual fund penetration beyond major urban centres. FICPs would assist investors with onboarding, documentation, KYC and transactions, but orders would have to be routed directly through the OBPP platform.
FICPs would need to be enlisted with a recognized stock exchange and meet eligibility requirements. Individual FICPs would have to be Indian citizens, at least 18 years old, have passed Class 12, and hold the relevant NISM certification. Mutual fund distributors registered with the Association of Mutual Funds in India (Amfi) could also apply as FICPs without paying any enlistment fee, subject to the proposed certification requirement.
The framework places significant responsibility on OBPPs. Platforms would have to conduct due diligence on FICPs, verify their enlistment and certification, provide training and undertake risk-based inspections. They would also be responsible for the acts of omission and commission of FICPs relating to distribution. OBPPs would have to maintain client-mapping records, monitor suspicious activity and complaints, and periodically contact investors onboarded through FICPs.
Sebi is also proposing restrictions aimed at preventing sales incentives from driving product recommendations. OBPPs would not be allowed to offer FICPs in-kind incentives, such as gift vouchers or electronic gadgets, to achieve sales targets. FICPs would have to ensure that financial incentives do not determine which securities or platforms they recommend.
The proposals are open to public feedback until 11 September.
The regulator has simultaneously proposed replacing the existing OBPP advertisement code with a revised framework. The new rules would require advertisements for specific securities to disclose the issuer, tenor, credit rating and relevant rating information, whether the security is secured or unsecured, clean and dirty prices, and yield to maturity. Advertisements would also have to carry a prescribed warning that fixed returns are not guaranteed returns and that debt securities are subject to market, credit and default risks.
Sebi has stopped short of banning terms such as “fixed returns”, “predictable returns” and “passive income”. However, such terms would have to be used in a generic and non-promissory manner, with appropriate risk disclosures
The proposed advertising code also seeks to address behavioural tactics such as artificial scarcity and urgency. Vague promotional descriptions such as “high yield” or “high returns” would be discouraged where they lack an objective basis. Advertisements would have to present disclaimers prominently rather than burying them in small print.
Apoorva is a Mumbai-based journalist at Mint who covers the Securities and Exchange Board of India (SEBI), tracking the pulse of India’s capital markets, regulatory developments and the people who operate within them. She holds a postgraduate diploma in business and financial journalism from the Asian College of Journalism, where she developed a strong foundation in markets, companies, and economic policy. She began her journalism journey with an internship at Bloomberg, where she worked across beats such as real estate, infrastructure, capital markets, and deals, which helped her understanding of business and finance.<br><br>She is guided by the belief that everything in this world can be explained in simple and fewer words, and that idea shapes how she approaches her writing. She aims to cut through complexity and present nuanced regulatory and financial developments in a way that is both accessible and meaningful to readers.<br><br>When she is not tracking market chatter, Apoorva can usually be found deep into a fiction novel or out on a long run. She is also a trained classical dancer in Bharatanatyam, Mohiniyattam, and Kathakali.
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document fetched 2026-08-22 06:37 · canonical https://livemint.com/market/sebi-bond-distributor-network-ad-rules-retail-participation-mutual-fund-11787316933242.html