SEBI has imposed a Rs 2 lakh penalty on IIFL Capital Services Limited after an inspection revealed that the firm executed 280 off-market trades worth Rs 9.59 crore in violation of mandatory RFQ platform requirements and failed to maintain written agreements with five third-party sellers on its online bond platform.
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The Securities and Exchange Board of India has levied a fine of Rs 2 lakh against IIFL Capital Services Limited over breaches of the rules governing the operation of its online bond platform.
Among the infractions recorded, 280 transactions totalling Rs 9.59 crore were routed through off-market channels rather than the Request for Quote (RFQ) platform that recognised stock exchanges require for such dealings. SEBI's adjudication order, issued on Tuesday, additionally established that the company had listed debt securities belonging to outside sellers on its online bond platform without first putting the required written agreements in place with those parties.
Regulators examined IIFL Capital's conduct across a window stretching from 26 July 2024 — the date on which the firm gained authorisation to function as an Online Bond Platform Provider (OBPP) — through to 31 March 2025. A total of 280 debt-security transactions worth Rs 9.59 crore were found to have bypassed the RFQ platform of a recognised stock exchange — the mandatory channel under SEBI's regulations — with those trades instead cleared through off-market arrangements.
Five third-party sellers whose securities were listed on IIFL Capital's platform had no formal agreements in place with the firm, the watchdog's review determined. Contracts and documentation that auditors had flagged as outstanding were subsequently put in place by the firm after the deficiency was brought to its attention.
Filing documents submitted by IIFL Capital disclosed that debt product offerings were put on hold from 13 June 2025, with a rebuilt version of the technology platform under development to close the identified compliance gaps. The firm traced part of the problem to its use of infrastructure built by GoldenPi Technologies Private Limited, a platform that, by the firm's own account, underpins a number of other bond-trading services operating online.
In its defence, the firm put forward three points: the infractions were not deliberate, its bond-trading platform operated online and had only recently launched, and the revenue it generated formed a small share of the company's total income. A plea for reduced penalties was placed before SEBI, backed by steps the entity had taken to address shortcomings and the absence of any complaints lodged by clients against the platform throughout the period under review.
Adjudicating officer Amit Kapoor of SEBI found that a financial penalty was warranted, concluding that the alleged violations had been sufficiently demonstrated on the evidence before him. The regulator noted that under the applicable circulars, the company bore a legal duty to comply.