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Corporate Laws Central Ministry of Finance Securities and Exchange Board of India Act, 1992

Clarification with respect to Specified Digital Platforms (SDPs)

04-Dec-2024 | PR No.31/2024

Securities and Exchange Board of India (SEBI) has issued a press release regarding clarification with respect to Specified Digital Platforms (SDPs)

The press release is issued in reference to several amendments, including the Securities and Exchange Board of India (Intermediaries) (Amendment) Regulations, 2024, the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Fourth Amendment) Regulations, 2024, and the Securities and Exchange Board of India (Depositories and Participants) (Second Amendment) Regulations, 2024, which were notified on August 26, 2024, wherein the regulations stipulate that persons regulated by SEBI, and their agents, shall not have any direct or indirect association with any person who:
i. Provides advice or recommendations related to securities unless duly registered or permitted by SEBI.
ii. Makes claims regarding returns or performance related to securities unless authorized by SEBI.

These provisions exclude associations through a "specified digital platform."

By virtue of this press release, the following is clarified in regard to the Specified Digital Platform-
1. "Specified Digital Platform" shall mean a digital platform as specified by the Board, having a mechanism in place that takes preventive as well as curative action, to the Board's satisfaction, to ensure that such a platform is not used for indulging in any of the abovementioned two prohibited activities.
2. It is not obligatory for any digital platform to be notified as SDP and there is no regulation of these digital platforms by SEBI.
3. The purpose of the above provision in various above-mentioned regulations is to provide confidence to REs that if they are associated with an SDP, it is automatically assured that they are not in violation of provisions of above-mentioned regulations.

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