SEBI's Whole-Time Member Kamlesh Varshney highlighted an alarming trend involving fake mobile apps that mimic SEBI-registered brokers as Investors, believing they are trading through legitimate platforms, end up transferring money to scammers — and lose it immediately.
“This is even more serious than pump-and-dump because investors lose their money the moment they make the payment,” Varshney told NDTV Profit on Friday.
To counter this, SEBI is launching a two-pronged approach from October. First, a UPI-based validated payment system will assure users that their money is going to a genuine intermediary. Second, SEBI is working with app stores to visibly mark verified apps of registered entities.
As part of its broader regulatory effort, SEBI has introduced a key rule to break the revenue stream of unregistered finfluencers. Under the revised intermediary regulations, SEBI-registered entities like brokers and advisors are barred from associating with any unregistered person giving investment advice or promising assured returns.
“If I am a registered broker, I cannot run ads next to unregistered advisors,” Varshney explained. “Even indirect association will be seen as a violation.”
Though SEBI is currently focusing on implementation and issuing warnings, enforcement action is likely in the next phase. Social media platforms are also being pushed to proactively screen and take down violative content, in line with their own community standards.
Looking ahead, SEBI is planning a major nationwide investor education campaign. Varshney confirmed that investor awareness will be the regulator's "next big mission," and a detailed plan is being developed in partnership with state governments and other stakeholders.
“Be wary of free advice. Only your close friends give that without interest. Most others have a motive. Don't fall for promises of doubling your money,” He issued a caution to viewers.
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