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Sebi cautioned investors against undertaking trading activities through virtual trading or gaming platforms
Investors were explicitly advised not to engage in investment or trading activities through unregistered intermediaries, apps, or platforms. S
Markets regulator Securities and Exchange Board of India (Sebi) has issued a warning to investors, advising them to avoid trading on virtual trading and gaming platforms and to ensure all their transactions are conducted through registered intermediaries.
Sebi Warns Against Unregistered Trading Platforms
Sebi has issued a statement emphasising that the public should only invest and trade in securities markets through registered intermediaries.
Advisory on Unauthorised Trading Apps and Platforms
Sebi’s advisory comes in response to the emergence of apps, web applications, and platforms offering virtual trading services, paper trading, or fantasy games based on the stock price data of listed companies. The regulator highlighted that such activities violate the Securities Contract (Regulation) Act, 1956 and the Sebi Act, 1992, which aim to safeguard investors.
Risks of Engaging with Unauthorised Schemes
Sebi warned investors about the risks involved in participating in unauthorised schemes, particularly those requiring the sharing of confidential and personal trading data. The regulator clarified that engaging with such unregistered platforms is at the investor’s own risk.
Investors Advised to Avoid Unregistered Platforms
Investors were explicitly advised not to engage in investment or trading activities through unregistered intermediaries, apps, or platforms. Sebi pointed out that protections available under its regulatory framework, such as the SCORES investor grievance redressal mechanism and the online dispute resolution mechanism, would not be accessible to those dealing with unauthorised entities.
Historical Warnings on Unauthorised Schemes
Sebi also reminded the public of its earlier caution in August 2016 against leagues, schemes, and competitions related to securities markets that might involve prize money distribution.
New Guidelines for Mutual Fund Investments in Overseas Entities
In a separate development, Sebi announced that mutual funds (MFs) can now invest in overseas mutual funds or unit trusts that allocate a specific portion of their assets to Indian securities. However, the total exposure of these overseas funds to Indian securities must not exceed 25% of their net assets. This move aims to simplify investments in overseas mutual funds, enhance transparency, and help MFs diversify their overseas portfolios.
(With agency inputs)
