Sebi's Stern Warning Against Dabba Trading

Markets regulator Sebi has once again issued a stark warning to investors about the dangers of dabba trading, emphasizing its illegality and urging the public to steer clear of such unauthorized trading services.

The Legal Standpoint

Dabba trading, which involves off-market trades outside recognized stock exchanges, violates several laws including the Securities Contracts (Regulation) Act, 1956, and the Sebi Act, 1992. Sebi is committed to protecting investor interests through stringent regulatory measures.

Recent Actions Taken

Following an advertisement promoting dabba trading in a daily newspaper, Sebi and the National Stock Exchange (NSE) have taken multiple actions. These include a formal complaint to the newspaper, legal action against the entities involved, and a referral to the Advertising Standards Council of India (ASCI) for potential violations of advertising norms.

Investor Alert

NSE has also issued an investor caution alert, advising the public to only engage with Sebi-registered brokers and recognized stock exchanges to avoid the risks associated with dabba trading.