Don’t trust prize linked plans: Sebi

The Securities and Exchange Board of India (Sebi) has cautioned investors against entities that are offering schemes and competitions related to securities market.

The regulator noted that various entities are soliciting investors by offering leagues or schemes or competitions related to securities markets. Some of the schemes involve distribution of prize money.

The regulator warned that any participation in such schemes including sharing of confidential and personal trading data would be at inves-tors’ own risk, cost and consequences as such schemes are neither approved nor endorsed by Sebi or Sebi recognised stock exchanges.

For any disputes arising out of such schemes, Sebi said investors will not have recourse to exchange’s dispute resolution mechanism or investors grievance redressal mechanism administered by the stock exchanges.

Sebi’s warning should be seen in the light of recent reports about the launch of several online stock gaming sites by a few entities where inves-tors are offered prize moneys for playing and winning games based on stocks price movement.

“It has also come to the notice of Sebi that certain electronic platforms are facilitating fund raising on digital platforms like websites and other internet platforms, which are similar to the platforms of stock exchanges. These digital platforms are neither authorised nor recognized under any law governing the securities market,” Sebi said.