Stock exchanges caution investors against unregulated schemes

Major domestic stock exchanges on Friday cautioned investors against dealing in unregulated investment schemes.

The NSE and the BSE noted that some unregistered entities and unregulated internet-based platforms are targeting gullible investors with false promises of exorbitant returns on their investment schemes and 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,” the NSE said in a statement.

It has suggested investors not to transfer funds or securities to the stockbroker under any arrangement or agreement of assured returns.

Investors are alerted not to fall prey to fraudsters sending emails and SMSs luring to trade in stocks promising huge profits or trading in unregistered products, it said.

On its part, the BSE advised investors to refrain from any investments arising out of a contract in securities which are not permitted, or which are not made subject to byelaws, rules and regulations of the exchange.

“Investors are also 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 stock broker,” the BSE said.