Investor alert: SEBI cautions against deceptive online bond platforms and misleading ads

New Delhi: The Securities and Exchange Board of India (SEBI) on Tuesday issued a public advisory urging investors to steer clear of unregistered online bond platforms, warning that several entities are offering bond investment services without mandatory regulatory approval.

SEBI said in its statement that a number of fintech firms and stockbrokers have been operating as Online Bond Platform Providers (OBPPs) without securing registration from recognised stock exchanges, a requirement outlined in the regulator’s circular dated November 14, 2022.

The caution follows a spate of newspaper advertisements promising unusually high guaranteed returns, promotions that have drawn sharp criticism on social media for misleading the public.

SEBI noted that unregistered platforms operate without regulatory oversight and lack essential investor protection measures, including formal grievance redressal systems. Their activities may also contravene provisions of the Companies Act, 2013, and the SEBI Act, 1992.

The regulator also reminded investors of an interim order issued on 18 November 2024 against entities involved in selling unregulated bonds.

Investors have been advised to verify the registration status of any OBPP before transacting and to use only those platforms that have secured official approval. Registration details are available on SEBI’s website.

In a related development, the Bombay Stock Exchange (BSE) issued a warning about fraudsters using photographs of BSE officials to create fake social media profiles offering bogus wealth advisory services.

“It has come to the attention that photos of senior BSE officials are being used to create fake social media IDs. The IDs created claim to provide a wealth advisory solution to mislead gullible investors,” the exchange said. “Investors are urged not to rely on any stock/share recommendation from any such fake social media handle and verify the source of communication before making any investment decisions.”, it added.

The BSE stressed that investors should avoid acting on stock or share recommendations from such fake accounts and should always verify the source before making investment decisions. It also advised investors to engage only with registered intermediaries, whose lists are available on SEBI and BSE websites.

IANS