MUMBAI: Warning that many fake investment apps promising assured returns are mushrooming by the day, taking the public for a ride, Sebi chairman Tuhin Kanta Pandey said such apps, which closely resemble those of Sebi-registered intermediaries, are not only defrauding investors but also damaging their trust in the market.
"The damage caused by such fake apps is not just financial, but also a loss of confidence. When trust is damaged, investor participation and market development suffers,” Pandey said here Wednesday while launching the ‘Sebi verified app label initiative,’ which is a simple but important investor protection measure by the regulator.
“This initiative is not just about a label on an app. It is about trust and safety. It is about helping investors distinguish the genuine from the fake,” he said.
Growing retail participation in the securities market, with more than 140 million unique investors, reflects greater trust in markets, he said, adding, “This opportunity also brings responsibility. We must make the journey of first-time investors safer. Growth has to be matched by protection.”
Sebi over the years has taken many steps towards investor protection such as Sebi Check and Validated UPI handles, which help investors to easily verify whether a payment is being made to a genuine Sebi-registered intermediary or not.
Pandey also said digital platforms are being actively monitored for misleading investment-related content and Sebi has ensured that more than 1.3 lakh pieces of content have been escalated to the platforms for takedown. Around 66 cases of fake trading apps have been escalated to app stores, which have been taken down.
An API-based framework is in place so that only verified, registered intermediaries can run advertisements on Google and Meta.
On the verified app label initiative, he said going forward, apps of Sebi-registered intermediaries will display a ‘verified badge’ on Google Play Store. This badge will help investors easily identify genuine apps and make impersonation harder. This visual cue reinforces a simple message: First verify. Then invest.
For now, this verified badge is being rolled out for apps of Sebi registered stock brokers on Google Play Store. It has already been deployed for over 600 such apps. In due course, it will be extended to apps of other Sebi-registered intermediaries as well, Pandey said.
“Our market is growing with its investor base and digital footprint expanding. For our growth story to remain strong, trust must remain at the centre. Safer technology builds trust. So does protecting investors before they part with their money. The verified app label initiative is one more step in this direction,” Pandey said.
The launch event was also graced by Sebi whole-time members Kamlesh Varshney and Sandip Pradhan, NSE, BSE, MCX and MSEI chief executives Ashishkumar Chauhan, Sundararaman Ramamurthy, Praveena Rai, and Latika Kundu apart from Aditya Swamy, head of Play Partnerships at Google.