SEBI Issues Warning Against Fake Trading Schemes For Foreign Investment

The Securities and Exchange Board of India has issued an advisory regarding fake trading schemes that claim to be linked with SEBI-registered foreign portfolio investors.

These schemes might trick you by offering special trading opportunities through FPI sub-accounts or fancy-sounding institutional accounts.

Tricksters use online trading courses, seminars, and mentorship programmes on social media platforms like WhatsApp or Telegram. They pose as SEBI-registered FPI employees and push individuals to download apps.

These apps claim to let you buy shares, subscribe to IPOs, and get "institutional account benefits" without a real trading account. They often use fake names and phone numbers to carry out their schemes.

It is crucial for the public to understand that the FPI investment route is not available to resident Indians, with limited exceptions outlined in the SEBI (Foreign Portfolio Investors) Regulations, 2019. There is no provision for an "institutional account" in trading. 

Direct access to the equities market requires investors to have a trading and demat account with a SEBI-registered broker or trading member and a depository participant, respectively. SEBI has emphasised that no relaxations have been granted to FPIs regarding securities market investments by Indian investors.

The market regulator strongly urged investors to exercise caution and avoid any social media messages, WhatsApp groups, Telegram channels, or apps claiming to facilitate stock market access through FPIs or FIIs registered with it. 

Such schemes are fraudulent and do not have SEBI's endorsement. Investors should verify the legitimacy of investment opportunities and only engage with SEBI-registered entities for their financial activities, the regulator has advised.