Not mandatory to register as specified digital platform, clarifies Sebi | Stock Market News
Source: Live Mint
Mumbai: The market regulator has clarified that it is neither mandatory for digital platforms to seek recognition as a ‘specified digital platform’, nor are they directly governed by Sebi regulations.
The Securities and Exchange Board (Sebi) had on 29 August said that regulated individuals or entities, such as stock exchanges, clearing corporations, depositories and their agents, should not be directly or indirectly linked to anyone who provides advice or recommendations on securities unless registered or permitted by the regulator; and anyone who makes claims about returns or performance of securities, unless approved by it.
However, it excluded associations that were recognized as specified digital platforms (SDPs) based on their ability to take preventive and corrective actions against prohibited activities.
In a clarification issued on December 4, the market regulator cited the confusion in the media about the obligation of digital platforms to be recognized as SDPs.
“It is not obligatory for any digital platform to be notified as SDP and there is no regulation of these digital platforms by SEBI. Curative actions currently being carried out by some digital platforms are in accordance with law. Preventive steps contemplated for any digital platform to get notified as SDP is not mandatory and it is for the platform to opt or not opt for getting notified as SDP,” Sebi said in a statement.
If a platform is designated as an SDP, Sebi said, regulated entities can be assured that their association with it will not lead to violations of the market regulator’s regulations. However, it added that regulated entities are not obligated to work exclusively with SDPs.
Sebi clarified that its primary goal to bring regulatory changes was to provide assurance to regulated entities that working with an SDP guarantees compliance with Sebi’s stringent rules.
