SEBI warns against fraudulent trading schemes offered by FPIs
Securities and Exchange Board of India has cautioned against fraudulent trading platforms, claiming to have affiliations with registered foreign portfolio investors and offering trading opportunities to resident Indians.
Fraudsters are enticing victims through online trading courses, seminars, and mentorship programs in the stock market, leveraging social media platforms like WhatsApp or Telegram, as well as live broadcasts, the regulator said.
Further, they coax individuals by representing them as employees or affiliates of SEBI-registered FPIs, making them download applications that purportedly allow them to purchase shares or subscribe to initial public offers — all without the need for an online trading or Demat account.
However, as per SEBI regulations, the FPI investment route is unavailable to resident Indians.
Also, there is no provision for an “Institutional Account” in trading, and direct access to the equity market requires investors to have a trading and a Demat account with a SEBI-registered broker.
“SEBI urges investors to exercise caution and to steer clear of any social media messages, Whatsapp groups, Telegram channels, or apps claiming to facilitate stock market access through FPIs or FIIs registered with SEBI,” the market regulator said in a release.
Such schemes are fraudulent and do not have SEBI’s endorsement, the regulator said.
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