SEBI seeks tighter checks by social media, tech firms to curb online investment scams

The Securities and Exchange Board of India (SEBI) has stepped up its efforts to tackle online investment scams and urged major social media platforms and search engine providers to introduce stronger safeguards against fraudulent activities targeting investors.

The market regulator said it has formally written to major online platforms, asking them to put in place robust mechanisms to prevent misuse of their systems for promoting fake investment products and schemes.

The initiative is in line with a global call by the International Organization of Securities Commissions (IOSCO), which in May this year underscored the need for greater accountability among digital platforms to combat online financial harm.

“SEBI supports IOSCO’s recommendations and…has called upon the platforms to immediately prioritize and fast-track” several measures for the Indian market, the regulator said in a statement.

Among the steps sought by SEBI are mandatory advertiser verification in the securities market domain to ensure only SEBI-registered entities can promote investment products, and verified labelling for authentic, regulated trading apps on app stores to help investors distinguish them from fraudulent ones.

Reiterating its advisory for retail investors, SEBI urged the public to verify the registration status of entities before investing and to transact only through genuine apps of registered intermediaries.

It also advised investors to use “validated UPI handles”, identifiable by the “@valid” tag, of SEBI-registered entities, and to make use of the “SEBI Check” platform or the Saarthi app for secure transactions.

The regulator has been running multiple awareness campaigns amid rising cases of fake trading apps, social media investment scams, and fraudulent UPI links that dupe retail investors.

In a separate statement, Sebi said it conducted a Municipal Bond and REIT/InvIT Outreach Programme in Raipur, Chhattisgarh, on October 30.

This is aimed at empowering urban local bodies, department of state government with knowledge and insights on municipal bonds, REIT/InvITs and capital market fundraising for infrastructure development.

The outreach programme saw participation of senior officials from 14 urban local bodies, including Raipur, Bilaspur, Bhilai, Raigarh, along with officials from Urban Administration and Development and Finance Department of the Government of Chhattisgarh, State Urban Development Agency.