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SEBI warns investors about online stock games betting on price movement



The Securities and Exchange Board of India (SEBI) has warned investors to be wary of online stock games on the Bombay Stock Exchange and National Stock Exchange. The markets regulator has a new problem on its hand  with websites which run online games and contests where people bet on stocks, currencies and commodities, reports the Times of India.

“Participation in such schemes is at investors’ own risks, cost and consequences. Such schemes are neither approved nor endorsed by Exchange,” BSE’s warning read. It added if investors signed up for these contests, they would not be given the redressal mechanism from the stock exchange.

Under such schemes, contestants have to pick a stock, currency or commodity and predict the increase or decrease price in a time frame. The Times of India report further added that companies such as the Indian Trading League (endorsed by cricketer Kapil Dev) and Stock Race (promoted by Satyug Gold Private Ltd.) are some of the companies running contests and offers investors prizes up to Rs 10 lakh. Stock Race, on the other hand, has prizes which include Mercedes Benz cars, Harley Davidson bikes, Apple products and gold coins.

The Indian Trading League has a flat Rs 20 transaction fee while Stock Race has no transaction fees, investors have to top up their accounts with virtual play points. The virtual points cannot be used calls in the stock and commodity markets. A spokesperson for Satyug told TOI that this cannot be considered gambling as this is a game of skill and not a game of chance.

Other SEBI developments

– In August, following muted response to the Institutional Trading Platform (ITP) for startups, SEBI further relaxed norms for companies to list on bourses. Accordingly, SEBI proposed that other investors, such as non-banking financial institutions (NBFCs), family trusts and investment funds, could hold 25% in the pre-issue capital other than qualified institutional buyers (QIBs).

– In May, SEBI impounded bank accounts of two individuals from Surat for running an unregistered investment advisory firm which widely used WhatsApp to give trading tips and stock specific recommendations. More an that here.

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