SEBI proposes Fixed Income Channel Partners to distribute bonds through online bond platforms; charges to clients capped at 2.5%. Comment window closed on 11 September 2026
A SEBI consultation paper issued on 21 August 2026 proposes a new class of Fixed Income Channel Partners (FICPs), enlisted with stock exchanges and appointed by Online Bond Platform Providers, to distribute fixed income securities on the lines of mutual fund distributors. FICPs could not handle client funds or charge clients, and AT1-type unsecured perpetual bonds would be out of bounds. Comments were due by 11 September 2026; the window has closed.
Key facts
- Published
- 21 August 2026
- Section
- SEBI
- What it is
- Comments invited
- In force
- Proposal only; comments were due by 11 September 2026 (window closed)
- Who it affects
- Online Bond Platform Providers, mutual fund distributors, stock brokers not in the debt segment, prospective bond distributors, stock exchanges, retail bond investors
In 30 seconds
- An FICP would be an individual or non-individual entity enlisted with a stock exchange and engaged by OBPPs to distribute fixed income securities.
- Individuals: Indian citizen, at least 18 years old, 12th standard pass, and a valid NISM-Series Fixed Income Securities Certification.
- AMFI-registered mutual fund distributors could apply without paying the enlistment fee, subject to passing the NISM certification.
- Enlistment valid for three years; the exchange to decide an application within 21 days.
- FICPs would be paid only by the OBPP; commissions/fee/brokerage charged to clients capped at 2.5% of the value of investment.
- Complaints against FICPs would not be eligible for the Investor Protection Fund or Settlement Guarantee Fund.
हिंदी में सार
SEBI ने 21 अगस्त 2026 के कंसल्टेशन पेपर में Fixed Income Channel Partners (FICP) का प्रस्ताव रखा है — स्टॉक एक्सचेंज में सूचीबद्ध वितरक, जिन्हें ऑनलाइन बॉन्ड प्लेटफ़ॉर्म (OBPP) नियुक्त करेंगे, म्यूचुअल फ़ंड डिस्ट्रीब्यूटर की तर्ज़ पर। पात्रता में 12वीं पास और NISM फ़िक्स्ड इनकम सर्टिफ़िकेट शामिल है; FICP ग्राहक का पैसा नहीं संभाल सकेंगे और ग्राहकों से लिया जाने वाला शुल्क निवेश मूल्य के 2.5% तक सीमित होगा। यह सिर्फ़ प्रस्ताव है; टिप्पणी की आख़िरी तारीख़ 11 सितंबर 2026 थी, जो निकल चुकी है।
What the paper is about
SEBI issued a consultation paper on 21 August 2026 proposing a framework for Fixed Income Channel Partners (FICPs) — distributors enlisted with stock exchanges and appointed by Online Bond Platform Providers (OBPPs). These are proposals for public comment, not decisions. Comments were to be submitted latest by 11 September 2026; that window has closed.
Background given by SEBI
- Outstanding corporate bonds grew from about ₹17.5 trillion at the end of FY15 to over ₹60 trillion as on 31 July 2026; listed corporate bonds are about ₹46 trillion.
- In FY26, debt issuances mobilised ₹9.1 trillion. Securities rated AA and above were more than 89% of the amount raised in FY 2025-26.
- Trades on the RFQ platform rose from 2.76 lakh in FY 2024-25 to 17.84 lakh in FY 2025-26, primarily due to retail participation through OBPPs.
- SEBI sees a gap in reaching retail investors in Tier II, Tier III and rural locations, and points to the role mutual fund distributors played in smaller towns.
The proposed framework
| Point | Proposal |
|---|---|
| Enlistment | With any one recognised stock exchange, applied for directly or through an OBPP. Decision within 21 days of a completed application. Enlistment number issued and list displayed on the exchange website |
| Individuals | Citizen of India; not less than 18 years; passed at least 12th standard; no conviction for fraud or dishonesty; not declared insolvent; valid NISM-Series: Fixed Income Securities Certification |
| Non-individuals | All partners/directors meet the individual criteria; at least one certified partner, director or employee, and only certified persons interface with clients; the object clause must permit distribution of fixed income securities |
| Others eligible | Stock brokers not registered in the debt segment may act as FICPs. AMFI-registered MFDs may apply without paying the enlistment fee, subject to passing the NISM certification |
| Validity | Three years, renewable; nominal, non-refundable fees similar to those for MFDs |
| Appointment | An FICP may be appointed by multiple OBPPs, after the OBPP’s due diligence including Know Your Distributor and in-person verification, under a written agreement |
| Fees | FICP is paid only by the appointing OBPP, by sharing of commission; it shall not collect any amount from a client. Commissions/fee/brokerage charged to clients capped at a maximum of 2.5% of the value of investment |
What an FICP could not do
- Handle client funds or securities, or receive or pay client money or securities in its own name.
- Issue deal slips, contract notes or invoices — these come directly from the OBPP.
- Seek authorisation from clients to trade on their behalf.
- Distribute unsecured perpetual debt instruments such as AT1 bonds.
Client orders would be routed and reported directly through the OBPP platform; the FICP’s access is limited to the display of products.
Responsibility and grievances
- OBPPs would be responsible for all acts of omission and commission of their FICPs, supervise them, hold pre-onboarding and annual training, and report client mapping to exchanges monthly.
- OBPPs could not offer FICPs incentives in kind for sales targets.
- The OBPP would endeavour to resolve a complaint against an FICP within 21 calendar days.
- Grievances against FICPs would not be eligible for mechanisms such as the Settlement Guarantee Fund or Investor Protection Fund.
- Exchanges could take disciplinary action and cancel enlistment after due process.
What to note
No FICP framework is in force yet. The Code of Conduct, disclosure format and model agreement would be prescribed by stock exchanges, in consultation with the OBPP association, before the framework commences.
Questions and answers
What is a Fixed Income Channel Partner?
As proposed, an individual or non-individual entity enlisted with a stock exchange, who may be engaged by Online Bond Platform Providers to distribute fixed income securities and facilitate transactions in them through the OBPP. The framework is a proposal, not yet in force.
Who could become an FICP?
An individual who is a citizen of India, at least 18 years old, has passed at least 12th standard, has no conviction for fraud or dishonesty, is not insolvent and holds a valid NISM-Series Fixed Income Securities Certification. Firms and companies, stock brokers not registered in the debt segment and AMFI-registered mutual fund distributors could also qualify.
How would an FICP be paid?
Only by the appointing OBPP, through sharing of commission out of the brokerage or other income the OBPP earns. The FICP could not levy or collect any amount from a client. Commissions, fees or brokerage charged to clients would be capped at 2.5% of the value of investment.
Could an FICP sell AT1 bonds?
No. The paper proposes that OBPPs ensure FICPs do not engage in distribution of unsecured perpetual debt instruments such as AT1 bonds through their platforms.
Is the comment window still open?
No. Comments were to be submitted latest by 11 September 2026.
Published 21 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.