Market regulator Sebi cautions investors against dabba trading practice

Sebi cautions investors against dabba trading, an illegal off-market activity, following an unregulated advertisement and assures action against those involved

The Securities and Exchange Board of India (Sebi) on Monday cautioned investors against dabba trading, an illegal and unregulated off-market trading activity. 

 

The market regulator’s advisory follows a full-page advertisement by a dabba trading company in a Hindi newspaper on July 13, assuring registration without documentation and very high margins.

 

Sebi added that a complaint has been lodged with the cyber police seeking appropriate legal action against the entity and others involved.

 

“Investors are advised to remain vigilant and not to deal with any entity offering illegal trading services,” said Sebi. 

 

Last week, the National Stock Exchange (NSE) had issued a caution notice to investors on the same.

 

The market regulator added that the matter has also been brought to the attention of the Advertising Standards Council of India (ASCI) to assess violations of advertising standards and to ensure appropriate corrective steps.

 

Sebi said that dabba trading is outside the purview of stock exchanges and regulatory oversight, posing significant risks to investors and a violation of several norms.

 

“It is reiterated that dabba trading is illegal, and Sebi is committed to safeguarding investor interests through regulatory enforcement, awareness, and coordination  with law enforcement agencies,” added the regulator.