SEBI Chief Warns Investors Against Digital Dabba Trading and Unregistered Advisors
SEBI Chairman Tuhin Kanta Pandey has issued a strong warning about the rising threat of unregistered investment advisors and digitally disguised ‘dabba trading’ operations, urging investors to exercise extreme caution.
Key Takeaways
- SEBI is cracking down on unregistered advisors and digital dabba trading platforms.
- Investors can now use new tools like SEBI Check and Spot a Scam for verification.
- The regulator has flagged over 1 lakh instances of misleading online content in 18 months.
The Evolving Threat Landscape
Addressing an investor awareness seminar in Coimbatore, Pandey highlighted how fraudulent trading apps now appear convincing, with digital profiles mimicking legitimacy. “Unregistered advisory groups lure individuals into unsafe trading channels, and dabba trading continues to reappear in new digital disguises,” he stated.
These operations represent coordinated attempts to exploit investor trust and aspirations, making it essential to avoid what he called “deception disguised as opportunity.”
SEBI’s Protective Measures
The regulator has implemented several safeguards:
- Validated UPI Framework: Ensures payments go only to SEBI-registered intermediaries
- SEBI Check Expansion: Allows instant verification of bank accounts via website and Saarthi app
- Account Freezing: Investors can voluntarily block trading accounts like compromised debit cards
- Spot a Scam Tool: Guides users on identifying suspicious schemes online
Cracking Down on Misleading Content
SEBI has flagged more than 100,000 instances of unlawful or misleading content across platforms including Meta, Google, Telegram and X over the past 18 months. Regulated entities are now prohibited from associating with unregulated advisors on social media.
The regulator is pushing for a verification system where only SEBI-registered entities can advertise investment products, along with a distinct verified label for legitimate trading apps.
These security enhancements come as India’s investor base expands dramatically, with unique securities investors growing from under 4 crore in FY19 to nearly 13.6 crore by October 2025.
