NSE, BSE ask investors to deal with only registered stock brokers

Leading stock exchanges NSE and BSE on Friday asked investors to deal with only registered stockbrokers amid instances of unregistered entities targeting gullible investors with false promises of exorbitant returns.

In separate statements, both the exchanges have asked investors not to transfer funds or securities to stockbroker under any arrangement or agreement of assured or guaranteed returns.

The advisory came after the exchanges noticed that some unregistered entities and unregulated internet-based platforms are targeting gullible investors with false promises of high/exorbitant returns on their investment schemes or products.

"Investors are advised to deal only with Sebi-registered stockbrokers and check the registration details of the said entity they are dealing with since it allows recourse to regulatory action," NSE and BSE said.

They have been cautioned not to transfer funds, for the purposes of trading to anyone, including an authorised person or an associate of the broker, other than a Sebi-registered stockbroker.

The exchanges have advised investors to refrain from any investments/dealings arising out of a contract in securities that are not permitted under the rules.

They have alerted investors against falling prey to fraudsters sending e-mails and SMSes luring them to trade in stocks or securities promising huge profit in unregistered schemes/ products.

Earlier this week, the two exchanges asked investors to refrain from investing in unregulated derivative products such as contracts for difference and binary options offered by internet-based trading platforms.

The exchanges said that investors falling prey to the promises of high or exorbitant returns by these trading platforms may eventually lose money heavily.