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.
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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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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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