SEBI receiving complaints regarding fraudulent trading platforms falsely claiming affiliation with FPIs

New Delhi, Feb 27: Markets regulator SEBI has asked 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.

Such schemes are fraudulent and do not have SEBI’s endorsement.

The Securities and Exchange Board of India (SEBI) has been receiving a number of complaints regarding fraudulent trading platforms which falsely claim or suggest affiliation with SEBI-registered Foreign Portfolio Investors (FPIs) and claims to offer trading opportunities through FPIs or Foreign Institutional Investor (FII) sub-accounts or institutional accounts with special privileges.

Fraudsters are enticing victims through online trading courses, seminars, and mentorship programs in the stock market, leveraging social media platforms like WhatsApp or Telegram, as well as live broadcasts.

Posing as employees or affiliates of SEBI-registered FPIs, they coax individuals into downloading applications that purportedly allow them to purchase shares, subscribe to IPOs, and enjoy “institutional account benefits” — all without the need for an official trading or Demat account, SEBI said.

These operations often use mobile numbers registered under false names to orchestrate their schemes.

SEBI said the FPI investment route is unavailable to resident Indians, with limited exceptions as outlined in the SEBI (FPI) Regulations, 2019.

There is no provision for an “institutional account” in trading, and direct access to the equities market requires investors to have a trading and Demat account with a SEBI-registered broker/trading member and DP, respectively.

SEBI has not granted any relaxations to FPIs regarding securities market investments by Indian investors.