Back to feeds

𝐈𝐧𝐯𝐞𝐬𝐭𝐨𝐫 𝐀𝐥𝐞𝐫𝐭: 𝐂𝐡𝐨𝐨𝐬𝐢𝐧𝐠 𝐭𝐡𝐞 𝐑𝐢𝐠𝐡𝐭 𝐁𝐨𝐧𝐝 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐏𝐥𝐚𝐭𝐟𝐨𝐫𝐦 The Securities and Exchange Board of India (SEBI) on 5th Dec 2024 issued a press release warning investors against transacting on unregulated online bond platforms promoting unlisted securities. Here's why it's essential to prioritize regulated options: 𝐖𝐡𝐲 𝐀𝐯𝐨𝐢𝐝 𝐔𝐧𝐫𝐞𝐠𝐮𝐥𝐚𝐭𝐞𝐝 𝐏𝐥𝐚𝐭𝐟𝐨𝐫𝐦𝐬? Unregulated platforms lack oversight, exposing investors to counterparty risks, no grievance redress mechanisms, and higher chances of defaults. If these platforms shut down, investors are left without recourse. 𝐓𝐡𝐞 𝐑𝐢𝐬𝐤𝐬 𝐨𝐟 𝐔𝐧𝐥𝐢𝐬𝐭𝐞𝐝 𝐁𝐨𝐧𝐝𝐬 Unlisted securities often promise high returns (15-18%), but at significant risk: - 𝘏𝘪𝘨𝘩𝘦𝘳 𝘋𝘦𝘧𝘢𝘶𝘭𝘵 𝘙𝘪𝘴𝘬: Smaller issuers, minimal scrutiny, and no mandatory disclosures. - 𝘓𝘪𝘲𝘶𝘪𝘥𝘪𝘵𝘺 & 𝘊𝘳𝘦𝘥𝘪𝘵 𝘙𝘪𝘴𝘬: Difficult to exit investments or assess creditworthiness. - 𝘕𝘰 𝘔𝘢𝘯𝘥𝘢𝘵𝘰𝘳𝘺 𝘙𝘢𝘵𝘪𝘯𝘨𝘴: Many unlisted debentures could turn out to be junk bonds. 𝐖𝐡𝐲 𝐂𝐡𝐨𝐨𝐬𝐞 𝐒𝐄𝐁𝐈-𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐞𝐝 𝐏𝐥𝐚𝐭𝐟𝐨𝐫𝐦𝐬? - 𝘐𝘯𝘷𝘦𝘴𝘵𝘰𝘳 𝘗𝘳𝘰𝘵𝘦𝘤𝘵𝘪𝘰𝘯: Grievance redress via SEBI’s SCORES platform. https://lnkd.in/gFG5hfsm - 𝘎𝘰𝘷𝘦𝘳𝘯𝘢𝘯𝘤𝘦: Mandatory credit ratings, quarterly updates, and adherence to advertising codes. - 𝘚𝘢𝘧𝘦𝘵𝘺: Funds and securities are processed through SEBI’s RFQ platform and national clearing corporations, ensuring transparency. 𝐓𝐢𝐩𝐬 𝐟𝐨𝐫 𝐁𝐨𝐧𝐝 𝐈𝐧𝐯𝐞𝐬𝐭𝐢𝐧𝐠: 1. Start small with SEBI-regulated platforms offering listed bonds. 2. Verify platform compliance on SEBI’s website and ensure proper registration via https://lnkd.in/gYw8hgYR 3. Begin with senior secured bonds rated investment-grade by a reputed agency. 4. Review issuer profitability, financial ratios, and bond details (maturity date, YTM, etc.). Make informed decisions and safeguard your investments! Explore trusted SEBI-regulated platforms and take your first step toward secure bond investing.