Markets regulator Sebi warns investors against trading in unlisted securities on unauthorised platforms

Markets regulator Sebi on Monday warned investors against conducting transactions in securities of unlisted public limited companies on unauthorised electronic platforms and websites.

The markets watchdog highlighted that such activities violate the Securities Contracts (Regulation) Act, 1956, and the SEBI Act, 1992, both aimed at safeguarding the interests of investors in the securities market.

In its statement, Sebi noted that some electronic platforms are facilitating the trading of unlisted securities without proper authorisation.

Cautioning investors, the regulator asked them "not to conduct any transactions on such electronic platforms or share any sensitive personal details on the same as these platforms are neither authorised nor recognised by Sebi".

This cautionary statement came following a similar warnings from the regulator regarding unauthorised virtual trading platforms, paper trading, fantasy games, and platforms offering unlisted debt securities.

In the latest release, Sebi emphasised that only recognised stock exchanges are authorised to provide platforms for fundraising and trading securities of listed or "to-be-listed" companies.

The list of Sebi-recognised stock exchanges is available on the regulator's official website.

Additionally, the regulator cautioned investors against sharing sensitive personal information on unauthorised platforms and engaging in transactions through them.

Further, the regulator said that these platforms are neither authorised nor recognised, and investors engaging in such activities would not be entitled to essential protections, such as investor protection under Sebi's or stock exchanges' jurisdiction, access to grievance redressal mechanisms administered by exchanges and dispute resolution services offered by authorised entities like smartodr.In.