Sebi warns of trading frauds in name of FPI accounts – Times of India

by The Technical Blogs


Sebi warns of trading frauds in name of FPI accounts

MUMBAI: Markets regulator Sebi on Monday cautioned investors of some fraudulent entities that were offering resident Indian investors trading opportunities that would be on a par with foreign funds. This is not possible under current rules and investors should be careful of such offers, Sebi said in a release.
Sebi said that fraudsters were enticing victims through online trading courses, seminars, and mentorship programs in the stock market through messaging platforms like WhatsApp and Telegram, as well as live broadcasts. These entities were claiming affiliations with foreign portfolio investors (FPIs) registered with Sebi and were claiming to offer stock trading for resident individuals through sub-accounts of such foreign funds.
“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,” the release said.
“It is important for the public to understand that the FPI investment route is unavailable to resident Indians, with limited exceptions. 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.”
Sebi urged 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 it.


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