Sebi Cracks Down on Illegal Dabba Trading Advertisements

Sebi warns investors against the illegal practice of dabba trading following a concerning advertisement. Identifying its violation of financial regulations, Sebi collaborates with NSE and cyber police to combat the issue. Investors are advised to engage only with registered brokers and exchanges for safer trading experiences.

The Securities and Exchange Board of India (Sebi) issued a stringent warning to investors on Monday, reiterating the illegal nature of dabba trading. Sebi cautioned investors against dealing with entities offering unauthorized trading services.

Dabba trading, often conducted off-market without regulatory oversight, violates several regulations including the Securities Contracts (Regulation) Act and the Sebi Act. Such activities pose substantial risks to uninformed investors.

This caution from Sebi followed a problematic advertisement in a daily newspaper promoting dabba trading. Sebi, alongside the National Stock Exchange (NSE) and cyber police, is taking robust actions to address the issue. The Advertising Standards Council of India (ASCI) has also been involved to evaluate advertising breaches.