SEBI Cautions Investors Not to Undertake Investment/Trading Activities Via Un-Registered Web Applications/E-Platforms

Press release PR No.34/2024 dated 09-12-2024

The SEBI has noticed that certain electronic platforms and/or websites are facilitating transactions in the unlisted securities of public limited companies. Such activities are in violation of Securities Contract (Regulation) Act, 1956 and SEBI Act, 1992.

To address this issue, the SEBI had earlier issued a Press Release dated August 30, 2016, which inter alia cautioned the public against these activities. Recently, SEBI has also issued Press Releases cautioning investors on unauthorised virtual trading platforms offering virtual trading/paper trading/fantasy games and unregistered online platforms offering unlisted debt securities.

Only recognized stock exchanges are authorised to provide a platform for fundraising and trading in securities of “to be listed” and “listed” companies.

Investors may note that for any kind of disputes relating to such activity, none of the following recourses will be available to investors of such platforms:

• Benefits of investor protection under SEBI/Exchange(s) Jurisdiction
• Investor grievance redressal mechanism administered by Exchange(s) or the online dispute resolution mechanism administered by Exchanges/Depositories (smartodr.in).

Therefore, investors are cautioned not to undertake investment/trading activities via un-registered web applications/e-platforms.

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