New Delhi, Dec 4 (PTI) Market regulator Sebi on Wednesday clarified that digital platforms, used by registered or regulated entities to associate with third parties, are not obligated to seek recognition as Specified Digital Platforms (SDPs).

The market regulator also stated that there is currently no regulatory framework in place for governing SDPs.

An SDP is a digital platform approved by Sebi that has mechanisms to prevent and address any prohibited activities, such as unregulated advice or claims.

In a statement, Sebi clarified that becoming an SDP is entirely voluntary for digital platforms.

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.

“It is not obligatory for any digital platform to be notified as SDP and there is no regulation of these digital platforms by Sebi. Curative actions currently being carried out by some digital platforms are in accordance with law. Preventive steps 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 said in a statement.

In August, the regulator amended rules whereby entities regulated by it such as stock exchanges, clearing corporations and, depositories and their agents cannot associate with individuals or entities that provide advice or recommendations about securities without Sebi’s registration and make claims of returns or performance related to securities without its permission.

These restrictions, however, do not apply if the association is through an SDP.

In its statement on Wednesday, Sebi said that the provision aims to assure regulated entities that partnering with an SDP automatically protects them from violations of certain norms, including the Intermediaries Regulations, SECC (Stock Exchanges and Clearing Corporations) Regulations and Depository Participants Regulations.

Further, regulated entities can also associate with platforms that are not SDPs. However, in such cases, the regulated entity is responsible for ensuring compliance with Sebi regulations, it added.