SEBI grants Regulatory Relief to Digital Platforms, Exempts SDP status requirement

The Securities and Exchange Board of India (SEBI) has announced that digital platforms operating in the securities market are no longer required to obtain Stock Depository Participant (SDP) status. This exemption is expected to streamline operations, reduce compliance burdens, and foster innovation in the digital securities ecosystem.

SEBI clarified that digital platforms do not perform the core functions of a depository participant, eliminating the need for them to hold SDP status. The move provides much-needed regulatory clarity, addressing long-standing ambiguity surrounding the role of digital platforms in the securities market.

The exemption comes at a time when digital platforms are becoming increasingly popular among investors for their user-friendly interfaces and accessible investment options. By removing the SDP requirement, SEBI aims to encourage the growth of digitalization and fintech innovation in the securities sector.

This regulatory relief will allow digital platforms to concentrate on expanding their service offerings, enhancing customer experiences, and investing in technological advancements without the constraints of additional compliance.

The decision has been widely welcomed by industry stakeholders, who view it as a progressive step toward modernizing India’s securities market. Experts believe this move will stimulate competition, attract new players, and improve accessibility for retail investors.

For investors, this decision translates to enhanced access to intuitive and efficient digital platforms, making it easier to invest in securities. The reduced compliance costs for platforms could lead to competitive pricing and better service delivery, ultimately benefiting end users.

SEBI’s decision to exempt digital platforms from obtaining SDP status marks a pivotal moment in India’s journey toward a more inclusive and technologically advanced securities market. By fostering a favorable regulatory environment, this move not only promotes ease of doing business but also strengthens India’s position as a hub for fintech innovation. Digital platforms, now unburdened by the SDP requirement, are poised to drive the next wave of growth in the securities sector.