SEBI proposes new initiative for retail participation in corporate bonds
What's the story
The Securities and Exchange Board of India (SEBI) has proposed a new initiative to expand retail participation in corporate bonds and other fixed income securities. The plan includes the creation of a network of Fixed Income Channel Partners (FICP). This is aimed at increasing engagement in the corporate bond market, especially in Tier-2 and Tier-3 cities across India.
Market expansion
Corporate bond market growth and institutional dominance
India's corporate bond market has witnessed phenomenal growth, with outstanding corporate bonds increasing from ₹17.5 lakh crore at the end of FY15 to over ₹60 lakh crore as of July 31, 2026.
In FY26 alone, debt issuances mobilized a whopping ₹9.1 lakh crore, nearly double what was raised through equity.
However, institutional investors still dominate this space.
Framework details
FICP as a new distribution framework
SEBI has proposed the FICP as a new distribution framework to develop the fixed income securities market.
The board believes that distributors can help investors understand the features and risks of these products, while also providing access to regulated investment platforms.
This could potentially extend the reach of fixed income securities to investors who are not well-acquainted with them.
Partner requirements
Eligibility criteria for becoming an FICP
To become an FICP, one must be an Indian citizen, at least 18 years old, have passed Class 12, and possess a valid NISM certification in fixed income securities.
The proposal also allows partnership firms and corporates to act as FICPs if they meet the prescribed eligibility conditions.
AMFI-registered mutual fund distributors can apply for this status without paying any enlistment fee, provided they obtain the relevant NISM certification.
Partner duties
Responsibilities and limitations of FICPs
Once enlisted with a stock exchange, FICPs will have to assist investors with onboarding, documentation, KYC, and facilitating transactions.
However, they won't be allowed to handle client funds or securities. All client orders would have to be routed directly through the OBPP platform.
The enlistment of these channel partners would remain valid for three years and could be renewed thereafter.