The Securities and Exchange Board of India has cautioned investors against entities that are collecting funds from the public, in the pretense of offering portfolio management services.
SEBI has advised the public to not fall for such schemes and deal only with SEBI-registered intermediaries, according to its press release.
(The) Public is advised to do proper due diligence before trusting their money in such unauthorised schemes.SEBI Press Release
According to the regulator, such entities—through various social media platforms as well as through pamphlets and other means—are luring the public with the promise of high returns when the SEBI (Portfolio Management) Regulations clearly stipulate that promise of assured return cannot be made.
They tend to collect money in relatively smaller amounts and often attract the public through names similar to that of a SEBI-registered intermediary, the statement said.
As per the regulations, only entities registered with SEBI are allowed to offer portfolio management services. This is undertaken through a contract between the entity and the client. The regulations also stipulate the minimum fund cannot fall below Rs 50 lakh.
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