SEBI Warns Against Unauthorised Trading Platforms for Unlisted Securities

SEBI has issued a warning to investors about trading securities of unlisted companies on unauthorised platforms. Such transactions violate legal acts aimed to protect investors. SEBI advises avoiding dealings on these platforms as they lack proper recognition and do not provide investor protections.

The Securities and Exchange Board of India (SEBI) has issued a stark warning to investors, cautioning them against conducting transactions involving securities of unlisted public limited companies on unauthorised electronic platforms.

This regulatory notice underscores that such dealings violate the Securities Contracts (Regulation) Act, 1956, and the SEBI Act, 1992, both designed to safeguard investor interests within the securities market. SEBI pointed out that certain electronic platforms are facilitating these illegal trades without proper authorisation.

Highlighting the risks, SEBI urged investors to refrain from sharing sensitive personal information or engaging in transactions on such platforms, emphasizing that only recognised stock exchanges are authorised to offer fundraising and trading services for listed or soon-to-be-listed companies.

(With inputs from agencies.)