Sebi issues advisory on social media entities touting FPI/FII market access; flags 5 misleading claims

With Pune-based finfluencer Avadhut Sathe under regulatory lens, market watchdog Securities and Exchange Board of India (Sebi) on Friday issued a fresh advisory, asking investors to exercise caution when dealing with social media messages, WhatsApp groups, Telegram channels, or apps claiming to offer stock market access through Foreign Portfolio Investors (FPIs) or Foreign Institutional Investors (FIIs).

These schemes are fraudulent and do not have Sebi’s endorsement, the advisory said, urging investors to be wary of claims made by individuals or entities.

Sebi's caution on 5 claims:

1) Institutional trading account
2) IPOs at discounted price
3) Guaranteed allotment in IPO
4) Ability to participate in Anchor book
5) Block Trade at discounted price

Also Read: Who is Avadhut Sathe, the Bollywood-style trading guru now under Sebi lens?

The FPI investment route is unavailable to resident Indians, with limited exceptions as outlined in the Sebi (Foreign Portfolio Investors) Regulations, 2019.

"Always verify the registration status of entities on Sebi’s website before investing and use only authentic trading apps from SEBI-registered intermediaries," the advisory said, recommending investors to stay informed.

Investors can visit Sebi’s investor website for resource material and Do’s and Don’ts of investing. They can also verify entity registration on Sebi’s website at https://www.sebi.gov.in/intermediaries.html.

The investors should carry out transactions only through authentic trading apps of Sebi registered intermediaries that can be found at https://investor.sebi.gov.in/Investor-support.html.

Sebi keeps issuing advisory against unregistered entities.

The regulator has been quite strict with the finfluencers acting against them on previous occasions as well. In February, this year, Sebi had taken action against Asmita Patel Global School of Trading Pvt Ltd and five other entities. In an interim order, Sebi had impounded Rs 53.67 crore earned by the popular stock market training school and directed the school, along with Asmita Jitesh Patel and her spouse Jitesh Jethalal Patel, to cease offering unregistered investment advisory and research analyst services.

Read more: Sebi bans 'She Wolf of stock market' YouTuber who made Rs 104 crore by selling tips

Sebi had also cracked down on 'Baap of Chart', a popular social media influencer in the trading community, and asked its operators to refund investors who had availed advisory services.

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