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It has come to the notice of Securities and Exchange Board of India (SEBI) that some platformsknownas‘OpinionTradingplatforms’providetheirusers/participants a platform to trade/enter into arrangements wherein the payout is dependent on the outcomeofayes/nopropositionofhappeningornothappeningoftheunderlyingevent. In some cases, opinion trading platforms are designed in a manner so as to resemble aninvestmentplatformastheyuseterminologiessuchasprofits,stoploss,tradingetc., terms closely associated with trades in securities.
In viewof the above, investors are advised to note that in general,opinion tradingdoes not fall within regulatory purview of SEBI, as what is traded is not security. Investors/participants should be aware that no investor protection mechanism under securities market purview shall be available for such investment/participation.
Sincenoneoftheplatformsprovidingopiniontradingcanqualifytoberecognizedstock exchange, and are neither registered or regulated by SEBI, any trading of securities on them is illegal (in case some of the opinions traded qualify as security). Such platforms are liable to face action for violation in that case. Recognized stock exchanges are advised to initiate appropriate action for such violations. Even in this case investor/participants are made aware that none of the investor protection mechanisms shall be available as their trades will not be on a recognized stock exchange.
The purpose of this press release is to create awareness about the role of SEBI withrespect to opinion trading platforms.
