Market regulator Securities and Exchange Board of India (SEBI) on November 4 cautioned investors about virtual trading, gaming platforms linked to stock prices.
Such platforms are in violation of securities regulations, said SEBI in a circular.
"It has come to the notice of Securities and Exchange Board of India (SEBI)that some apps / web applications/ platforms are offering virtual trading services or paper trading or fantasy games to the public based on stock price data of listed companies. Such activities are in violation of Securities Contract (Regulation) Act, 1956 and SEBI Act, 1992, which are laws designed to protect investors," the regulator said.
"Participation in unauthorised schemes, including sharing of confidential and personal trading data, is at the investors’ own risk, cost and consequences, as such schemes / platforms are not registered with SEBI," the regulator added.
SEBI warned that investors won't be able to raise grievances through SEBI-approved mechanisms in case of a dispute during such activities.
"The investors may note that for any kind of disputes relating to such activity, none of the following recourses will be available to investors: a) Benefits of investor protection under SEBI/ Exchange(s) Jurisdiction, including SCORES. b) Investor grievance redressal mechanism administered by Exchange(s) or the online dispute resolution mechanism administered by Exchanges/Depositories (smartodr.in)," said SEBI.
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