The Securities and Exchange Board of India (SEBI) on December 04, 2024, issued a clarification regarding the regulatory provisions related to Specified Digital Platforms (SDPs) appearing in various news articles.
A “specified digital platform” has been defined to mean digital platform as specified by the Board, which has a mechanism in place to take preventive as well as curative action, to the satisfaction of the Board, to ensure that such a platform is not used for indulging in any of the abovementioned two prohibited activities.
The clarification addresses the obligation of digital platforms to be recognized as a "Specified Digital Platform" (SDP). Key points include:
• No Obligation to Become an SDP: Digital platforms are not required to be notified as SDPs, and they are not regulated by SEBI (Securities and Exchange Board of India).
• Voluntary Registration: Digital platforms can choose whether or not to get recognized as an SDP. Preventive steps for such recognition are not mandatory.
• Regulatory Assurance for Associated Entities: If a regulated entity is associated with an SDP, it is automatically protected from being considered in violation of specific SEBI regulations (Regulations 16A, 44B, and 82B) related to intermediaries, stock exchanges, and depositories.
• No Exclusivity in Associations: A regulated entity is not required to associate exclusively with an SDP. It can also associate with platforms that are not SDPs, but must ensure compliance with the relevant SEBI regulations.
Further, it is stated that, becoming an SDP is voluntary for digital platforms, and while associating with an SDP provides regulatory protection, entities can also engage with non-SDP platforms, provided they ensure regulatory compliance.
[PR No. 31/2024]
