SEBI Warns Investors Against Trading Unlisted Securities On Unauthorised Online Platforms

Mumbai, June 17: The Securities and Exchange Board of India (SEBI) on Wednesday issued a fresh caution to investors against buying, selling or transacting in unlisted securities of public limited companies through unauthorised electronic platforms and websites.

In a statement, the market regulator warned that several such platforms continue to facilitate trading in unlisted stocks despite previous advisories issued by SEBI.

SEBI Advises Investors to Avoid Unauthorised Platforms

The regulator urged investors to exercise caution and avoid sharing sensitive personal information on these platforms, which are neither authorised nor recognised by SEBI.

“Investors are once again cautioned about the risks in conducting any transactions/trading on such electronic platforms or sharing any sensitive personal details on the same as these platforms are neither authorised nor recognised by SEBI,” the regulator said.

The market regulator noted that it had earlier issued similar warnings in December 2024 and August 2016.

However, it has observed that unauthorised platforms offering trading in unlisted securities continue to operate and attract investor participation.

Transactions May Not Be Covered by Regulatory Safeguards

The regulator highlighted that investors who transact through such platforms may not be entitled to regulatory safeguards available in the formal securities market.

These include investor protection benefits under SEBI and stock exchange jurisdiction, grievance redressal mechanisms and online dispute resolution facilities provided through recognised exchanges and depositories.

Reiterating its position, SEBI said that only recognised stock exchanges are authorised to provide platforms for fundraising and trading in securities in India.

Market Regulator Reiterates Earlier Warnings

The market watchdog has, on previous occasions, also cautioned investors against dealing with unauthorised virtual trading platforms that offer paper trading, fantasy trading games and simulated investment products.

It has similarly warned against unregistered online platforms facilitating transactions in unlisted debt securities.

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The market regulator advised investors to verify the regulatory status of any platform before carrying out securities-related transactions and to use only authorised and regulated market infrastructure institutions for trading and investment activities.

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