CHENNAI: The Securities Exchange Board of India (SEBI) on Monday said it has been receiving a number of complaints against fraudulent trading platforms falsely claiming as SEBI-registered foreign portfolio investors (FPIs) or offering trading opportunities through FPI accounts.
These platforms are claiming to offer trading opportunities through foreign institutional investors’ (FIIs) sub-accounts or institutional accounts with special privileges, it said.
SEBI, in a statement, said scammers are enticing victims through online trading courses, seminars, and mentorship programmes in the stock market, using social media platforms such as WhatsApp or Telegram and live broadcasts. “Posing as employees or affiliates of SEBI-registered FPIs, they coax individuals into downloading applications that purportedly allow them to purchase shares, subscribe to IPOs, and enjoy ‘Institutional account benefits’ —all without the need for an official trading or Demat account.”
The market regulator clarified that the FPI investment route is unavailable to resident Indians, with limited exceptions as per SEBI (Foreign Portfolio Investors) Regulations, 2019. There is no provision for an ‘Institutional Account’ in trading, it said, adding direct access to the equities market requires investors to have a trading and Demat account with a SEBI-registered broker/ trading member and depository participant respectively.
SEBI has not granted any relaxations to FPIs regarding securities market investments by Indian investors, it said.
SEBI urged the investors to exercise caution and to beware of social media messages, WhatsApp groups, Telegram channels or apps claiming to facilitate stock market access through FPIs or FIIs registered with SEBI. Such schemes are fraudulent and do not have SEBI’s endorsement. It said these kinds of operations often use mobile numbers registered under false names to orchestrate their schemes.