The Securities and Exchange Board of India (Sebi) is considering the creation of a specialised category of distributors for the debt market, Whole-Time Member Amarjeet Singh said on Wednesday.
Speaking at the Federation of Indian Chambers of Commerce & Industry’s Financial Products Distribution Summit 2026, Singh said the move could help widen retail participation in debt investment products. “We are examining a proposal to introduce a specialised category of distributors to expand the reach of the debt segment and promote the retailisation of bonds. Much like mutual fund (MF) distributors, they are expected to simplify the investment process for retail investors by assisting with know-your-customer formalities, documentation, and transaction initiation,” he said.
Singh also stressed the need for “ethical distribution”, observing that oversight of distributors remains largely light-touch and that the market regulator does not directly regulate them. He urged financial distribution entities to line up their internal incentive and reward structures with investor protection objectives.
He said the Association of Mutual Funds in India has constituted an ethics committee, while Sebi is working with industry participants on ethics and capacity-building initiatives. Singh further asked distributors to maintain the same standards of suitability and transparency across digital and offline communication channels. “While digital channels improve awareness and outreach, they can also amplify misinformation, speculative behaviour, and short-termism. Market participation should be driven by informed decision-making and long-term planning, not by momentum or social media trends,” he said.
He cautioned that an excessive focus on short-term performance, rapid customer acquisition, or distribution volumes could increase the risk of mis-selling and unsuitable product recommendations.
On the sidelines of the summit, Singh said the regulator could soon issue a consultation paper proposing reforms for the portfolio management services industry. He added that Sebi’s working group is also engaging with the industry to streamline regulations governing MF distributors and investment advisors.