Strengthening investor protection key priority for regulator: Sebi chief

Addressing a regional investor awareness seminar organised by the BSE in Coimbatore, Tuhin Kanta Pandey said the challenge has intensified in an age where misinformation spreads faster than facts

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Markets regulator Sebi Chairman Tuhin Kanta Pandey on Thursday stressed the need to strengthen investor protection, warning that unregistered advisory groups continue to lure individuals into unsafe trading channels and that dabba trading keeps resurfacing in new digital forms.

Addressing a regional investor awareness seminar organised by the BSE in Coimbatore, Pandey said the challenge has intensified in an age where misinformation spreads faster than facts. Fraudulent trading apps look convincing, digital profiles mimic legitimacy, and guaranteed-return schemes promise what no regulated market can offer.

Reiterating the seriousness of the threat, he noted that such "unregistered advisory groups lure individuals into unsafe trading channels, and dabba trading continues to reappear in new digital disguises".

Such unregistered advisory groups and disguised dabba operations are not isolated incidents, but coordinated attempts to exploit investor trust, curiosity and aspiration. This makes it essential, he said, to ensure that people do not fall prey to "deception disguised as opportunity".

To counter this, Pandey emphasised that awareness must evolve into digital caution, informed scepticism and a habit of verification before taking any financial step. Strengthening investor protection, he said, has therefore become a key priority for the regulator.

As part of these efforts, Sebi has introduced a validated UPI handle framework to ensure payments are made only to authentic UPI IDs of Sebi-registered intermediaries. The Sebi Check feature has also been expanded, enabling investors to instantly verify the genuineness of bank accounts on the Sebi Investor website and the Saarthi mobile app.

Recognising that fraudulent activity can strike without warning, investors can now also voluntarily freeze or block their trading accounts, similar to blocking a compromised debit card, an option designed to offer immediate protection.

To further help individuals identify suspicious schemes, Sebi has launched the Spot a Scam tool, guiding users on how to verify authenticity online.

Pandey highlighted that Sebi has flagged more than 1 lakh instances of unlawful or misleading online content on social media and search platforms, including Meta, Google, Telegram and X, over the past 18 months.

In line with this, regulated entities are not permitted to associate with unregulated advisors on social media, helping prevent the spread of false claims and harmful influence, he added.

Earlier this month, Sebi announced that it has intensified engagement with major social media and internet platforms, urging them to strengthen safeguards against fraudulent investment-related content.

The regulator had pushed for a verification process ensuring only Sebi-registered entities can advertise investment products, and suggested the introduction of a distinct verified label for legitimate trading apps to help users steer clear of fake platforms.

These measures come at a time when India is witnessing record participation in its securities markets. As of October 2025, the ecosystem includes nearly 13.6 crore unique investors, up from fewer than 4 crore in FY19, while the number of unique mutual fund investors has surged from about 1 crore a decade ago to over 5.6 crore at present.