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Sebi proposes new channel partner network to boost retail bond access
It has suggested creating a new network of fixed income channel partners (FICP) to help expand retail participation in corporate bonds and other fixed income securities, particularly in Tier-2 and Tier-3 cities.
The proposal comes as India’s corporate bond market has expanded rapidly, with outstanding corporate bonds rising to over ₹60 lakh crore as of July 31, 2026, from about ₹17.5 lakh crore at the end of FY15.
Banks ride RBI swap wave to raise $12 billion via overseas debt
This week was the busiest for forex debt issuance by Indian lenders. ICICI Bank, Kotak Mahindra Bank, IDFC First Bank, HDFC Bank and Bank of Baroda together raised a massive $4.4 billion, and the bulk of the proceeds may be used to help fund the leverage for foreign currency non-resident (bank) [FCNR (B)] deposits.
Debt issuances mobilised ₹9.1 lakh crore in FY26, nearly twice the amount raised through equity, but the market continues to be dominated largely by institutional investors.
“Over the years, the mutual fund distributor (MFD) model helped mutual funds to reach smaller towns and cities. A large part of the growth in retail folios from tier 2 and tier 3 locations came through the distributor channel, rather than through direct online platforms,” Sebi said in a discussion paper.
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“Keeping in view the impact of MFD model, it was felt that a similar distribution framework could support the development of the fixed income securities market. Distributors can help investors understand the features and associated risks of fixed income securities and assist in accessing regulated investment platforms. Such a framework may also improve the reach of fixed income securities to investors who may not be familiar with these products,” it said.
Read more: West Asia tensions cloud market outlook, Nifty may stay rangeboundUnder the proposal, an individual seeking to become an FICP must be an Indian citizen, at least 18 years old, have passed Class 12 and hold a valid NISM certification in fixed income securities. The framework would also allow partnership firms and corporates to act as FICPs, subject to prescribed eligibility conditions.
AMFI registered mutual fund distributors would be allowed to apply for FICP status without paying an enlistment fee, provided they obtain the relevant NISM certification.
FICPs would enlist with a stock exchange, which would be required to decide on completed applications within 21 days. The enlistment would remain valid for three years and could be renewed.
The channel partners would assist investors with onboarding, documentation, KYC and facilitating transactions, but would not be permitted to handle client funds or securities. Client orders would have to be routed directly through the OBPP platform.
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