The SEBI has raised concerns about certain websites and electronic platforms that are allowing people to trade in unlisted securities of public limited companies. SEBI clarified that such activities violate laws designed to protect investors, such as the Securities Contract (Regulation) Act, 1956, and the SEBI Act, 1992.
Key Points to Note:
1. Earlier Warnings:
- SEBI previously issued warnings (e.g., in August 2016) to alert the public about unauthorized trading activities.
- Recently, SEBI also cautioned against platforms offering virtual trading, paper trading, fantasy games, and unlisted debt securities.
2. Risks for Investors:
- These platforms are not recognized or authorized by SEBI.
- Sharing sensitive personal details or conducting transactions on these platforms can expose investors to risks.
3. Where Trading is Allowed:
- Only SEBI-recognized stock exchanges are legally authorized to facilitate trading in securities of listed and “to be listed” companies.
- A list of SEBI-recognized stock exchanges is available on SEBI’s official website: www.sebi.gov.in.
4. Consequences of Using Unauthorized Platforms:
- Investors will not receive any protection under SEBI regulations.
- Dispute resolution mechanisms provided by exchanges or depositories, such as smartodr.in, will not be applicable.
Advice for Investors:
- Avoid using unregistered websites or apps for trading or investments.
- Do not share personal or sensitive details on such platforms.
- For safe trading, stick to SEBI-authorized stock exchanges.
You can read the full press release from SEBI here:
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