Beware of Opinion Trading Platforms: Sebi's Strong Warning

Sebi has warned the public against engaging with 'opinion trading platforms', which operate outside official regulation and lack investor protection under securities law. These platforms resemble investment schemes but are not regulated or recognized by Sebi, posing significant risks to investors.

The Securities and Exchange Board of India (Sebi) has issued a stern caution to the public regarding 'opinion trading platforms', often mistaken for legitimate investment avenues. These platforms, Sebi clarified, fall outside the regulatory framework and do not offer investor protection provided under securities law.

According to a recent public advisory, 'opinion trading platforms' allow users to trade on the outcomes of binary propositions. Despite using financial terminology typically associated with investments, these platforms are neither recognized nor regulated by Sebi.

Sebi emphasized that trading on these platforms is illegal if the transactions qualify as securities. Recognized stock exchanges have been asked to address any violations. The regulator's warning is aimed at raising awareness about these unauthorized platforms and the risks they entail.

(With inputs from agencies.)