SEBI Warns Against Fraudulent Trading Platforms | 15 Mar 2024

Source: IE

The Securities and Exchange Board of India (SEBI) has issued a cautionary statement regarding deceptive trading platforms falsely asserting ties with its registered Foreign Portfolio Investors (FPIs).

Pretending as SEBI-registered FPIs, they entice individuals to download applications promising access to stock purchases, IPO subscriptions, and exclusive 'institutional account benefits.'
- These platforms lure individuals through online trading courses, seminars, and mentorship programs, exploiting social media platforms like WhatsApp or Telegram.
SEBI clarified that the FPI route is not accessible to resident Indians, with limited exceptions outlined in the SEBI (Foreign Portfolio Investors) Regulations, 2019.
- Also, there is no provision for an Institutional Account.
FPIs encompasses financial investments made by foreign individuals, corporations, and institutions in Indian financial assets like stocks, bonds, and mutual funds.
- Unlike Foreign Direct Investment (FDI), which involves long-term ownership of assets, FPI is primarily driven by the aim of achieving short-term gains and portfolio diversification.