The Securities and Exchange Board of India (Sebi) has issued a clarification after queries have been raised in various news articles about the obligation of digital platforms to get recognition as a Specified Digital Platform.

In the press release issued on December 4, the market regulator said that the provision of associating with a third party through an SDP was given to REs only to assure the REs that they will not be held accountable if there is any violation of the concerned provisions.

Regulated entities such as stock exchanges, clearing corporations and depositories are not obligated to work exclusively with specified digital platforms, says Sebi.

SEBI clarification further added that curative actions currently being carried out by some digital platforms are in accordance with law. Preventive steps are contemplated for any digital platform to get notified as SDP is not mandatory and it is for the platform to opt or not opt for getting notified as SDP.

SEBI clarified that digital platforms are not obligated to register as specified digital platforms (SDPs), though regulated entities must ensure compliance when partnering with non-SDP platforms.

Sebi clarifies that digital platforms do not need to seek Specified Digital Platform status, as it is voluntary and no regulatory framework exists.

Says the association of regulated entities with SDPs will assure that they are in compliance of Sebi's regulations