Mumbai, 30 April (IANS). The Capital Market Regulatory Securities and Exchange Board of India (SEBI) has issued a strict warning regarding the use of the opinion trading platform.
The warning states that these platforms do not work under regulatory inspection of SEBI and do not provide any protection to investors under securities laws.
SEBI said in an advice that some online platforms, called the ‘opinion trading platform’, allow users to trade on the results of the event of ‘yes or no’.
Payment depends on whether a certain event occurs or not.
For example, users can trade on whether a sports team will win or not, or a special political decision will be taken.
SEBI said that these platforms often use financial words like ‘Profit’, ‘Stop Loss’ and ‘Trading’, which gives a feeling that they are legitimate investment platforms.
The market regulator said, “Some platforms named ‘Opinion Trading Platform’ provide a platform to their users to trade/enter the system, in which the payment depends on the result of the proposal ‘yes or no’ proposal.”
However, SEBI clarified that Opinion Trading is not under its regulatory structure, as what is being traded is not considered securities under Indian laws.
As a result, users of such platforms cannot avail any investor safety or legal safety measures that apply to regulated securities markets.
The regulator said in advice, “Investors/participants should know that investor security mechanisms will not be available for such investment/participation in the scope of securities market.”
SEBI also said that these platforms are not recognized stock exchange and are not registered or regulated by market regulators.
If any ‘opinion’ being traded is under the definition of securities, then such business will be illegal and strict action can be taken against the platform involved.
Recognized stock exchanges have also been instructed to take appropriate action if such violations are revealed.
The purpose of this warning is to tell people that SEBI does not regulate these platforms and any investment made on them is completely at the investor’s own risk.
SEBI reported that some platforms are like a ‘opinion trading’ gambling, despite the claim of promoting ‘skill-based engagement’.
The regulator urged investors to be vigilant and not misled by promise of immediate return of such platforms.
-IANS
SKT/ABM
