Authority: Adjudicating Officer, Securities and Exchange Board of India (SEBI)

Order Date: October 13, 2026

Case Overview

SEBI conducted an inspection of IIFL Capital Services Limited (PAN: AAACI7397D) from June 26-30, 2025, covering the period July 26, 2024 to March 31, 2025. The inspection focused on IIFL's operations as an Online Bond Platform Provider (OBPP) registered since July 26, 2024 (Registration No. INZ000164132). The inspection revealed two primary violations of SEBI Master Circular No. SEBl/HO/DDHS/PoD1/P/ClR/2024/54 dated May 22, 2024.

First, IIFL failed to route 280 trades totaling ₹9.59 crore through the mandatory Request for Quote (RFQ) platform of a recognized stock exchange as required by Clause 3.4.1 of Annex-XXI-A. Instead, these trades were executed through off-market mechanisms. The quarterly breakdown showed: Q3 FY2024-25 (70 trades, ₹1.86 crore), Q4 FY2024-25 (108 trades, ₹3.62 crore), and Q1 FY2025-26 (102 trades, ₹4.11 crore).

Second, IIFL failed to execute mandatory agreements with five third-party sellers whose inventory was offered on its platform: Kanjalochana Finserve Private Limited, Smest Capital Private Limited, Tipsons Financial Services Pvt. Ltd., Tipsons Consultancy Services Private Limited, and Phillip Capital (India) Pvt. Ltd. Agreements were only executed post-inspection.

IIFL's defense cited the newness of the OBPP segment (registration obtained July 2024), dependence on a vendor platform from Golden Pi Technologies Private Limited used by other OBPPs, and temporary suspension of debt operations since June 13, 2025. IIFL also emphasized the minimal revenue contribution from OBPP operations (₹96 million vs total revenue of ₹25,674 million in FY25) and absence of client complaints.

Final Outcome

Adjudicating Officer Amit Kapoor found IIFL guilty of both violations and imposed a penalty of ₹200,000 under Section 15HB of the SEBI Act. The order requires payment within 45 days through SEBI's online portal, with recovery proceedings authorized for non-payment. The penalty was determined considering the absence of quantifiable disproportionate gain or investor loss, though noting IIFL's past penalties in other segments.

Topics: SEBI Enforcement, Regulatory Compliance, Online Bond Platforms