Market regulator SEBI declared that there is no need for registered or regulated companies or those using digital platforms to connect with third parties to apply for registration as Specified Digital Platforms (SDPs).

The market regulator mentioned about the absence of a structure in place to regulate SDPs at the moment.

A SEBI-approved digital platform with safeguards against and procedures for handling any illegal activity, including unregulated advice or claims, is known as an SDP.

For digital sites, being an SDP is completely optional, Sebi explained.

In response to inquiries concerning the requirement for digital platforms to be recognized as Specified Digital Platforms in a number of news pieces, the Securities and Exchange Board of India (Sebi) has released an explanation.

"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.

The regulator changed its regulations in August, prohibiting stock exchanges, clearing corporations, depositories, and their agents from collaborating with people or organizations that offer securities advice or recommendations without being registered with Sebi and from claiming returns or performance on securities without its consent.

However, if the association is made using an SDP, these limitations are not applicable.

According to Sebi, the purpose of the clause is to reassure regulated organizations that working with an SDP will automatically shield them from breaking rules such as the Depository Participants Regulations, the Intermediaries Regulations, and the SECC (Stock Exchanges and Clearing Corporations) Regulations.

Additionally, platforms that are not SDPs can associate with regulated companies. It further stated that in certain situations, the regulated entity is in charge of making sure Sebi rules are followed.