“The public is urged to exercise caution in undertaking transactions on such unregistered platforms,” Sebi said while adding that such platforms appeared to provide an avenue for investors to acquire unlisted debt securities
These platforms are not subject to any regulatory or supervisory oversight, and lack basic investor protection or investor grievance redress mechanisms.
The activities undertaken by the unregistered online platforms or issuers of the unlisted debt securities are in violation of Companies Act rules, according to the regulator.
This violation occurs because offering unlisted securities to more than 200 investors makes it a deemed to be public issue under. Sebi noted that these activities could result in legal, regulatory or enforcement action against those involved.
Recently, Sebi issued an interim order against some entities operating such unregistered platforms. Investors should consider utilising online bond platforms operated by Sebi-registered stock brokers authorised by the BSE or NSE.Sebi has issued this caution, advising investors to not engage with or undertake investment or trading activities through un-registered intermediaries, web applications, platforms and apps.The regulator said investors won’t be able to take recourse under Sebi for any kind of disputes relating to such activities. The benefits include investor protection under Sebi jurisdiction and investor grievance redressal mechanism administered by exchanges.
Sebi urged market participants to share details of any unregistered entities or platforms offering unlisted debt securities via the market intelligence (MI) portal of the regulator (https://mi.sebi.gov.in/)
