Source: TOI
Context:
The Securities and Exchange Board of India (SEBI) has intensified efforts to curb online investment scams and protect retail investors amid rising instances of fraudulent financial promotions and fake trading platforms across digital spaces.
Key Development
- SEBI has formally written to major social media and search engine companies, urging them to adopt robust verification and monitoring mechanisms to prevent misuse of their platforms for securities frauds.
- This move aligns with the International Organization of Securities Commissions (IOSCO)’s global call for stricter online safeguards against financial harm to investors.
SEBI’s Key Requests to Digital Platforms
- Verification of Advertisers:
Only SEBI-registered entities should be allowed to advertise investment products or services on social media or search engines. - Distinct Labelling for Authentic Apps:
Introduce a unique label or verification badge for genuine trading and investment apps on app stores to help users distinguish them from fraudulent ones. - Prompt Implementation:
SEBI urged these platforms to prioritize and fast-track the adoption of these measures for the Indian market.
Supporting Investor Protection Initiatives
To further enhance market safety, SEBI has recently launched:
- UPI Verification Feature:
Investors can now verify if a UPI QR code used to transfer funds to a market intermediary is legitimate. SEBI has developed an app to facilitate this check. - Intermediary Verification Tools:
Investors can visit SEBI’s official website to confirm whether:- The app or platform they are using is registered with SEBI.
- The market intermediary they are dealing with holds a valid SEBI registration.
