Securities and Exchange Board of India

CP n°27/2024

Advice on unauthorized trading platforms/virtual games

The Securities and Exchange Board of India (SEBI) has noticed that some applications/web applications/platforms are offering virtual trading services, paper trading or fantasy games to the public based on stock market data of listed companies.

Such activities violate the Securities Contracts (Regulation) Act, 1956 and the SEBI Act, 1992, which are laws designed to protect investors.

SEBI also issued a press release dated August 30, 2016 which warned the public against leagues/programs/competitions related to securities markets, which may involve distribution of prize money.

It is recalled that the public can only invest and undertake trading activities in the securities markets through registered intermediaries.

Participation in unauthorized programs, including sharing of confidential and personal trading data, is at the investors’ risks, costs and consequences, as such programs/platforms are not registered with SEBI.

SEBI issues this caution, advising investors not to engage or undertake any investment or trading activities through unregistered intermediaries/web applications/platforms/apps. Investors may note that for any type of dispute relating to such activity, none of the following remedies will be available to them:

• Benefits of investor protection in SEBI jurisdiction/stock exchange(s) including SCORES.
• Investor grievance mechanism administered by stock exchanges or online dispute resolution mechanism administered by stock exchanges/depositories.

Bombay
November 4, 2024