The Securities and Exchange Board of India (Sebi) issued a warning on Monday, advising investors to be cautious of deceptive trading platforms that purport to provide stock market access to Indians via the Foreign Portfolio Investors (FPIs) route. Sebi highlighted that fraudsters are luring victims through online trading courses, seminars, and mentorship programs in the stock market, utilizing social media platforms like WhatsApp or Telegram, as well as live broadcasts. These individuals, pretending to be employees or associates of Sebi-registered FPIs, encourage people to download applications that claim to enable them to buy shares, subscribe to IPOs, and enjoy "institutional account benefits" without the necessity of an official trading or demat account. Sebi further emphasized that these operations frequently employ mobile numbers registered under false names to execute their schemes.

The cautionary statement from Sebi follows numerous complaints it received concerning fraudulent trading platforms falsely asserting affiliation with FPIs and promoting trading opportunities through FPI or institutional accounts with special privileges. It is crucial to note that, as per Sebi's FPI Regulations, the FPI investment route is not available to resident Indians, except for specific limited exceptions.

Moreover, Sebi clarified that there is no provision for an "Institutional Account" in trading. To gain direct access to the equities market, investors must possess a trading and demat account with a Sebi-registered broker and depository participant, respectively. The regulator firmly stated that it has not granted any relaxations to FPIs concerning securities market investments by Indian investors.

In light of these developments, Sebi urged investors to exercise caution and avoid falling prey to social media messages, WhatsApp groups, Telegram channels, or apps claiming to facilitate stock market access through FPIs or FIIs registered with Sebi. It explicitly stated that such schemes are fraudulent and do not have Sebi's endorsement.