SEBI warns investors of fraudulent trading platforms claiming FPI links

SEBI warning: The Securities and Exchange Board of India (SEBI) has issued a warning against fraudulent trading platforms that falsely claim affiliations with registered foreign portfolio investors (FPIs) while offering trading opportunities to resident Indians.

According to the regulator, fraudsters are luring victims through various means, including online trading courses, seminars, and mentorship programs related to the stock market. These schemes are often promoted via social media platforms such as WhatsApp or Telegram, as well as through live broadcasts.

The fraudulent entities misrepresent themselves as employees or affiliates of SEBI-registered FPIs, convincing individuals to download applications purportedly enabling them to purchase shares or subscribe to initial public offerings (IPOs). Importantly, they claim that these activities can be conducted without the necessity of an online trading or Demat account.

Under SEBI regulations, the FPI investment route is not available to resident Indians. Moreover, there is no provision for an "Institutional Account" in trading. Direct access to the equity market mandates investors to possess trading and a Demat account with a SEBI-registered broker.

In a statement, the regulator stressed the importance of investor caution and advises individuals to avoid social media messages, WhatsApp groups, Telegram channels, or applications promising stock market access through FPIs or FIIs registered with SEBI. Such schemes, SEBI asserts, are fraudulent and lack endorsement from the regulator.

“SEBI urges investors to exercise caution and to steer clear of any social media messages, Whatsapp groups, Telegram channels, or apps claiming to facilitate stock market access through FPIs or FIIs registered with SEBI,” the market regulator said in a release.