MUMBAI: The Securities and Exchange Board (SEBI) has issued an advisory against unauthorised virtual trading and gaming platforms and apps/web applications which are offering virtual trading/paper trading services and fantasy games to the public based on stock price data of listed companies.
“Such activities are in violation of the Securities Contract (Regulation) Act, 1956 and SEBI Act, 1992,” SEBI said in a statement on Monday. It reiterated that the public can invest and undertake trading in securities markets only through/with registered intermediaries.
In the past too, SEBI had warned the public against such apps. In August 2016, it cautioned the public against leagues/schemes/competitions related to securities markets, involving prize money.
“Participation in unauthorized schemes including sharing of confidential and personal trading data is at the investors’ own risk, cost and consequences, as such schemes/platforms are not registered with SEBI,” the statement said.
Further, the regulator said that despite the warning, if a few chose to engage with or undertake investment or trading activities through unregistered intermediaries/web applications/platforms/apps, they will not get any recourses that are available to other investors in case of disputes or loses.
Investors trading through SEBI-registered intermediaries have the benefits of investor protection under SEBI/exchange jurisdiction including Scores and investor grievance redressal mechanism administered by exchanges or the online dispute resolution mechanism administered by exchanges/depositories.