SEBI cautions investors against fake STT notices, bogus account handlers

SEBI cautions investors against fake STT notices, bogus account handlers

• SEBI warns investors about fake STT notices and account scams
• Fraudsters impersonate SEBI, demand payments using forged letters
• Use only SEBI-registered intermediaries and apps, investors urged

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Market regulator Securities and Exchange Board of India (SEBI) has issued twin warnings to investors amid a rise in market-related frauds, flagging fake Securities Transaction Tax (STT) notices and scams involving so-called ‘account handling’ services that promise assured returns.

In a press release issued on Thursday, SEBI said fraudsters are circulating forged notices demanding payment of STT using fake SEBI letterheads and impersonating officials. The regulator clarified that STT is levied on exchange transactions and collected by brokers, and SEBI does not issue notices asking investors to remit such payments or coordinate with the RBI for collections.

SEBI press release stated, “ Investors are being made aware that these notices have not been issued by SEBI. It is being informed that STT is  levied  on  every  purchase  and  sale transaction  of  securities  executed  on  stock exchanges and the tax is collected by the broker. SEBI does not issue notices to remit STT amounts nor does it coordinate with RBI on the same”.

Separately, SEBI cautioned investors against individuals offering ‘account handling’ services who claim to generate risk-free profits by managing investors’ trading accounts. These operators often portray themselves as experts, PMS providers or fund managers, demand a share of profits, and lure victims by showcasing purported high-return trades.

The regulator said such fraudsters typically ask investors to share trading account credentials and then execute trades directly. While profits and losses are reflected in the investor’s own account, the operators only claim a share in gains and bear no downside risk. SEBI emphasised that these entities are unregistered and fall outside its regulatory purview.

SEBI press release stated, “Investors are advised to not trust claims of such account handlers/ fraudsters and refrain from sharing their account credentials with anyone. These account handlers/ fraudsters are not registered by SEBI and do not fall under the purview of SEBI”.

SEBI urged investors not to share login credentials and to transact only through SEBI-registered intermediaries and authentic trading apps. It also advised verifying enforcement actions, intermediary registrations and payment requests through official SEBI portals, noting that genuine regulatory emails carry the “@sebi.gov.in” domain.

Meanwhile, exchanges have also issued similar advisories, warning market participants against responding to fraudulent communications and urging verification through official channels.