NSE warns investors about illegal dabba trading groups

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NSE warned investors

Highlights

NSE has warned investors to stay away from the 'Online dabba trading Mumbai' Facebook group, calling it an illegal trading service.
The exchange clarified that this group is not registered as any of its members or authorized persons and advised investors not to share their trading credentials.
NSE stated that in disputes related to such illegal schemes, investors will not get investor protection from the exchange nor will the grievance redressal mechanism be available.

This article was translated from the original. Read the original version by our correspondent here.

Exchange warning on illegal trading service

National Stock Exchange of India has stated that a Facebook group named “Online dabba trading Mumbai” is offering dabba, i.e., illegal trading services. The exchange clarified that this person, entity, or social media channel is not registered as any of its members or as an authorized person of any registered member.

Investors are advised to stay away from any scheme or product that promises indicative, assured, or guaranteed returns in the stock market. The exchange also advised investors not to share their trading credentials, such as user ID and password, with anyone.

The exchange has provided a “Know/Locate your Stock Broker” facility on its website, where investors can check details of registered members and their authorized persons. Information about client bank accounts declared by trading members is also available at this link, so investors can verify before transacting with any person, entity, or social media channel.

Risks and limited relief for investors

The exchange said that such prohibited schemes are neither approved nor supported by it. Participation in any such arrangement is entirely at the investor’s own cost, risk, and consequences.

NSE also warned that if any dispute arises from such prohibited arrangements, investors will not be entitled to investor protection benefits under the exchange’s jurisdiction. Furthermore, the exchange’s dispute resolution mechanism and investor grievance redressal mechanism will also not be available in such cases.

Our previous report discussed NSE’s warning regarding action against unregistered operators offering illegal dabba trading and alleged guaranteed return/account handling services. It was reported that a person named ‘Priya’ was claiming to be associated with ‘Apex Broking Firm’ and offering such services via Facebook and a website, which led to a police complaint. The article also clarified that in case of disputes in such prohibited arrangements, the exchange’s investor protection and grievance/dispute resolution mechanisms are generally not available.

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