Description
SEBI warns investors against fraudulent schemes claiming to offer stock market access through Foreign Portfolio Investors to Indian residents.
Summary
SEBI has issued a high-priority advisory warning investors against fraudulent trading schemes that falsely claim to offer stock market access through Foreign Portfolio Investors (FPIs) or Foreign Institutional Investors (FIIs) to Indian residents. These schemes are being promoted through social media platforms, WhatsApp groups, Telegram channels, and unauthorized apps.
Key Points
- Fraudulent schemes claiming FPI/FII access for Indian residents are circulating on social media platforms
- These schemes falsely promise institutional trading accounts, discounted IPOs, guaranteed IPO allotments, anchor book participation, and discounted block trades
- FPI investment route is generally unavailable to resident Indians with only limited exceptions under SEBI (Foreign Portfolio Investors) Regulations, 2019
- Investors must verify entity registration status on SEBI’s website before investing
- Only use authentic trading apps from SEBI-registered intermediaries
Regulatory Changes
No new regulatory changes introduced. This advisory reinforces existing regulations under SEBI (Foreign Portfolio Investors) Regulations, 2019 that restrict FPI investment route access for resident Indians.
Compliance Requirements
- Investors must verify registration status of entities on SEBI’s website at https://www.sebi.gov.in/intermediaries.html
- Use only authentic trading apps of SEBI-registered intermediaries available at https://investor.sebi.gov.in/Investor-support.html
- Exercise caution when dealing with unsolicited investment offers through social media channels
- Report suspicious schemes to SEBI
Important Dates
- Advisory issued: August 22, 2025
- Immediate effect: Investors should exercise caution starting immediately
Impact Assessment
This advisory addresses a significant threat to retail investor safety and market integrity. Fraudulent FPI schemes can cause substantial financial losses to unsuspecting investors and undermine confidence in legitimate market participants. The warning is particularly important given the widespread use of social media and messaging platforms for investment promotion, requiring heightened investor awareness and regulatory vigilance.
Impact Justification
High-severity fraud warning protecting retail investors from significant financial losses through fake FPI schemes