Investors warned against dealing with foreign trading portals

The inherent complexity of the products offered by such firms, web portals, and platforms may not suit the risk profile of investors and their excessive leverage can result in significant losses to investors

Illustration: Uttam Ghosh/Rediff.com

Sebi has cautioned investors against dealing with foreign trading portals or platforms. The regulator said domestic investors are being drawn into online trading by overseas websites and platforms.

The regulator added that as these websites are not being supervised by any regulatory body in India, investors need to be cautious when it comes to dealing with them.

“The inherent complexity of the products offered by such firms, web portals, and platforms may not suit the risk profile of investors and their excessive leverage can result in significant losses to investors,” Sebi said.

It added investors will not have any recourse when dealing with foreign portals unlike when dealing with stock exchanges in India.

Sebi said investors dealing with recognised stock exchanges in India have the options, such as dispute resolution mechanism and investor grievance redressal mechanism.

The regulator has cautioned that investors will not have any recourse when it comes to dealing with foreign portals.