Sebi cautions against scams, mis-selling amid rising retail participation

With India’s retail investor base swelling to nearly 140 million, markets regulator Securities and Exchange Board of India (Sebi) is stepping up efforts to bridge the gap between basic awareness and informed investing, chairman Tuhin Kanta Pandey said on Friday.

 

Speaking at Outlook Money’s 40After40 event, Pandey said that while technology has made investing more accessible and inclusive, many new investors are entering markets with only moderate understanding of risks, leaving them vulnerable to mis-selling, scams and risks they do not fully understand.

 

“General awareness about securities markets is merely the first step in the knowledge ladder. There is a gap between awareness and informed participation,” Pandey said, citing Sebi’s recent investor survey. “Trust matters even more today because participation, especially retail, is expanding rapidly.” 

 

Pandey said Sebi has intensified its response to a growing number of scams and cyber frauds involving entities falsely claiming to be Sebi-registered and offering guaranteed returns, often routing payments through QR codes or cloned mobile applications.

 

To counter this, the market regulator has introduced ‘Sebi Check’, a facility that allows investors to verify payment details of registered intermediaries within seconds. The regulator has also mandated a new UPI handle structure for intermediaries collecting investor funds, with verified handles carrying a unique “@valid” identifier.

 

Stock exchanges have been directed to maintain white lists of authorised broker applications, while the regulator is actively monitoring digital platforms for misleading investment content and escalating such material for takedown, Pandey said.