Dealing in shares of ‘to be listed companies/unlisted companies’ – SEBI cautions you
Securities and Exchange Board of India [‘SEBI’] by way of its Press release dt: December 9, 2024 has cautioned investors against investing in platform and /or website facilitating transaction in unlisted securities of public limited companies.
SEBI has further stated that these platforms are unauthorised platform. Investors should not conduct any transactions on such electronic platforms or share any sensitive personal details on the same as these platforms are neither authorized nor recognized by SEBI.
It has come to the notice of SEBI that there were certain platforms or website that were offering trading in shares of certain renowned ‘to be listed companies’
Dealing in shares happens only through recognised stock exchange SEBI stated. SEBI had earlier issued a Press Release dated August 30, 2016, which inter alia cautioned the public against these activities.
This guidance by SEBI comes under investor protection initiative of SEBI.
SEBI has advised investors that for any kind of disputes relating to such activity, none of the following recourses will be available to investors of such platforms:
a. Benefits of investor protection under SEBI/ Exchange(s) Jurisdiction
b. Investor grievance redressal mechanism administered by Exchange(s) or the online dispute resolution mechanism administered by Exchanges/Depositories (smartodr.in)
Recently Registrar of Companies all over India have adjudicated on this matter and penalized certain companies who allowed their unlisted shares to be dealt on some unauthorized platforms.
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Disclaimer: This article provides general information existing at the time of preparation and we take no responsibility to update it with the subsequent changes in the law. The article is intended as a news update and Affluence Advisory neither assumes nor accepts any responsibility for any loss arising to any person acting or refraining from acting as a result of any material contained in this article. It is recommended that professional advice be taken based on specific facts and circumstances. This article does not substitute the need to refer to the original pronouncement.
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