Markets regulator Securities and Exchange Board of India (SEBI) has issued a fresh warning to investors about the growing number of unauthorized entities offering financial services through platforms and apps.

This is SEBI’s third advisory this year, emphasizing the risk of engaging with unregistered services that could lead to financial losses.

The latest advisory highlights how certain apps and web platforms promote virtual trading, paper trading, and fantasy games based on the stock prices of listed companies.

SEBI clarified that these activities violate regulations meant to protect investors and that the public should only invest or trade through registered intermediaries to ensure safety and compliance.

The market regulator had issued an advisory earlier in August 2016, where it had warned investors against leagues/schemes/ competitions related to securities markets, which might involve the distribution of prize money.

“It is reiterated that the public can invest and undertake trading activities in the securities markets only through/with registered intermediaries. Participation in unauthorised schemes, including sharing of confidential and persnal trading data, is at the investors’ own risk, cost and consequences, since these schemes/ platforms are not registered with the regulator,” it said.

Earlier this year, in February, SEBI issued another advisory warning about fraudulent trading schemes targeting Indian investors.

Fraudsters were reportedly luring victims with promises of benefits similar to those enjoyed by foreign institutional investors, using social media and live sessions to deceive individuals.

The regulator stated that these schemes often involve fake claims and mobile numbers registered under false names, explaining that the FPI route is not available to resident investors, except under certain specific conditions.

SEBI also warned in February about entities falsely claiming to be registered intermediaries, offering assured and high returns.

“Investors are urged to conduct due diligence and verify the registration status of any entity claiming to be a Sebi-registered intermediary. It is imperative for investors to understand that investments offering high returns usually involve high risk including fraud risk and there can be no guarantees of assured returns in the securities market,” the advisory said.

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