Online Bond Platform Providers may now offer 54EC / section 85 capital-gains bonds and IFSCA-regulated products; compliance officer rule changed
SEBI has widened what Online Bond Platform Providers can offer. From 14 August 2026 they may offer bonds issued under section 54EC of the Income Tax Act, 1961 or section 85 of the Income-tax Act, 2025, and products regulated by IFSCA, each with labelling and disclaimer conditions. The compliance officer is now to be appointed as per the Stock Brokers Regulations, 2026 in place of a Company Secretary.
Key facts
In 30 seconds
- Circular No. HO/17/11/(2)2026-DDHS-POD1/I/18769/2026 is dated 14 August 2026 and is in force with immediate effect.
- It modifies Chapter XXI of the NCS Master Circular dated 15 October 2025.
- IFSCA is added to the list of financial sector regulators whose products an OBPP may offer.
- IFSCA-regulated products must be clearly labelled as international or overseas instruments.
- For 54EC / section 85 bonds, the platform must say that grievance redress lies with the issuer, not SEBI.
- Compliance officer: as per the SEBI (Stock Brokers) Regulations, 2026, with NISM-Series-III-A certification.
हिंदी में सार
SEBI ने 14 अगस्त 2026 के सर्कुलर से Online Bond Platform Providers को धारा 54EC (Income Tax Act, 1961) / धारा 85 (Income-tax Act, 2025) के कैपिटल गेन बॉन्ड और IFSCA द्वारा विनियमित उत्पाद बेचने की अनुमति दी है। इन्हें अलग टैब में दिखाना होगा; 54EC बॉन्ड पर यह बताना होगा कि शिकायत निवारण SEBI के पास नहीं, जारीकर्ता के पास है। Compliance officer के लिए Company Secretary की शर्त की जगह अब Stock Brokers Regulations, 2026 के अनुसार नियुक्ति होगी।
Before and now
The entity has appointed a Company Secretary as a compliance officer.
A compliance officer as per the SEBI (Stock Brokers) Regulations, 2026, who meets the NISM-Series-III-A certification requirement for stock brokers.
Background
SEBI prescribed a regulatory framework for Online Bond Platform Providers (OBPPs) by a notification of 9 November 2022, under regulation 51A of the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021. Later circulars dealt with registration, the list of permissible products and operational requirements. The circular of 14 August 2026 modifies Chapter XXI of the NCS Master Circular dated 15 October 2025, on suggestions from stakeholders to promote ease of doing business.
What an OBPP may offer now (clause 5.2)
| Clause | Product, security or service |
|---|---|
| 5.2.1 | Listed debt securities, listed municipal debt securities and listed securitised debt instruments |
| 5.2.2 | Debt securities, municipal debt securities and securitised debt instruments proposed to be listed through a public offering |
| 5.2.3 | Listed Government Securities, State Development Loans and Treasury Bills |
| 5.2.4 | Listed Sovereign Gold Bonds |
| 5.2.5 | Other products, securities or services regulated by a financial sector regulator — SEBI, RBI, IRDAI, IFSCA or PFRDA |
| 5.2.6 | Bonds issued under section 54EC of the Income Tax Act, 1961 or section 85 of the Income-tax Act, 2025 |
The additions are IFSCA in clause 5.2.5 and the whole of clause 5.2.6.
Conditions for products of other regulators
- They may be offered under a different tab on the online bond platform, or on any other website or platform.
- They are governed by the directions of the respective regulator.
- The OBPP must specify the grievance redressal mechanism for them on its platform.
- IFSCA-regulated products must be offered in the manner specified for SEBI-registered stock brokers operating within GIFT-IFSC, and in compliance with FEMA, 1999, including the Overseas Investment Rules and the limits under the Liberalised Remittance Scheme. They must be clearly labelled as international or overseas instruments, to prevent confusion with domestic debt securities.
Conditions for 54EC / section 85 bonds
- A different tab on the platform, or any other website or platform.
- A disclaimer that these are tax specific instruments and that the grievance redressal mechanism lies with the issuer and not with SEBI.
- Disclosure of the features of the bonds: eligible issuers, lock-in period, investment limit, non-transferable status, tax features, application size, and exemption from listing requirements under the LODR Regulations.
- A prominent statement that the investment is meant for investors seeking the associated tax benefits, subject to the eligibility criteria and conditions of the Income-tax Act.
Compliance officer
Clause 1.1 of Annexure-XXIA now requires a compliance officer appointed as per the SEBI (Stock Brokers) Regulations, 2026, who meets the certification requirement for stock brokers — NISM-Series-III-A: Securities Intermediaries Compliance (Non-Fund) Certification Examination. The earlier text required a Company Secretary as compliance officer.
What platforms should do
Before listing the new products, an OBPP should build the separate tab, the labels and the disclaimers the circular asks for. Stock exchanges are directed to put systems in place, amend their bye-laws where applicable and bring the circular to the notice of stock brokers.
Questions and answers
Can 54EC bonds be bought through an online bond platform?
An Online Bond Platform Provider is now permitted to offer bonds issued under section 54EC of the Income Tax Act, 1961 or section 85 of the Income-tax Act, 2025, either under a different tab on its platform or on another website or platform, with the prescribed disclaimer and disclosures.
Who handles complaints about 54EC bonds bought on such a platform?
The platform must carry a disclaimer that these are tax specific instruments and that the grievance redressal mechanism does not lie with SEBI but with the issuer.
Can an OBPP offer products from the IFSC?
Yes. Products, securities or services regulated by IFSCA may be offered in the manner specified for SEBI-registered stock brokers operating within GIFT-IFSC and in compliance with FEMA, including the Overseas Investment Rules and LRS limits. They must be clearly labelled as international or overseas instruments.
Does an OBPP still need a Company Secretary as compliance officer?
The clause has been changed. It now requires a compliance officer appointed as per the SEBI (Stock Brokers) Regulations, 2026, who complies with the NISM-Series-III-A certification requirement for stock brokers.
Published 14 August 2026. Updated 5 October 2026. This report is for general information and is not professional advice. Read the source document before acting on it.