Sebi cautions investors against unauthorised virtual trading, gaming platforms

Delhi Delhi. Market regulator Sebi on Monday cautioned investors against carrying out trading activities through virtual trading or gaming platforms and asked them to deal only through registered intermediaries.The advisory statement came after the Securities and Exchange Board of India (Sebi) observed that certain apps/web applications/platforms are offering virtual trading services or paper trading or fantasy games to the public based on stock price data of listed companies.

The regulator said such activities are in violation of the Securities Contracts (Regulation) Act, 1956 and the Sebi Act, 1992, which are laws enacted to protect investors.In a statement, Sebi reiterated that the public can undertake investment and trading activities in securities markets only through/with registered intermediaries.It said, “Participation in unauthorised schemes, including sharing of confidential and personal trading data, is at investors’ own risk, cost and consequences, as such schemes/platforms are not registered with Sebi.” Cautioning investors, SEBI asked them not to engage in or undertake investment or trading activities through unregistered intermediaries/web applications/platforms/apps.

For any dispute arising out of involvement in such activities, investors will not be entitled to the benefits of investor protection under the jurisdiction of SEBI or the exchanges such as SCORES, investor grievance redressal mechanism administered by the exchanges or online dispute resolution mechanism administered by the exchanges/depositories. Earlier in August 2016, SEBI had cautioned the public against leagues/schemes/competitions relating to securities markets, which may involve distribution of prize money.