Markets regulator Sebi on Wednesday issued a fresh warning to investors against trading in unlisted securities of public limited companies on unauthorized electronic platforms and websites.
In a press statement, Sebi reiterated that these digital platforms are neither recognized nor authorized by the regulator. It firmly stated that only recognized stock exchanges are permitted to provide infrastructure for fundraising and securities trading.
The regulator also strongly advised the public against sharing sensitive personal details on these websites.
No Regulatory Safety Net
Sebi cautioned investors that because these platforms operate outside its regulatory purview, any disputes arising from transactions on them will leave investors completely stranded. The regulator explicitly noted that users of these platforms will not have access to investor protection benefits and grievance redressal mechanisms.
This is not the first time the market watchdog has cracked down on gray-market digital ecosystems. Sebi noted that it has previously issued warning notices most recently in 2024.
The regulator has also previously red-flagged unauthorized virtual trading platforms offering fantasy games or paper trading, alongside unregistered online portals pushing unlisted debt securities.
