MCX has cautioned investors from dealing with unregulated platforms that are offering trading in certain unregulated derivative products called Contracts for Difference and Binary Options.

Further, some unregistered entities and unregulated internet-based platforms are targeting gullible investors with false promises of exorbitant returns on their investment schemes and products.

Some fraudsters are also sending emails and text messages luring the clients to trade in these platforms, said MCX in a statement on Tuesday.

The lure toward risky platforms

The increase in trading charges and roll-out of peak margin which calls for entire money for trading as upfront margin have been driving investors to such risky platforms, said an analyst.

Earlier, even the NSE and the BSE had warned investors in dealing in these kind of platforms.

MCX said clients falling prey to such fraudulent promises of exorbitant returns by these platforms may eventually lose money.

“Investors are advised to refrain from investing in unregulated internet-based trading platforms. They should deal only with SEBI registered Stockbrokers after duly checking their credentials. It may be noted that only dealings with SEBI registered stockbrokers on the Exchange platform offer recourse to regulatory action,” it said.

“Clients should not transfer funds or securities to any person including a stockbroker under any arrangement including assured returns as the same is prohibited. However, they can transfer funds and securities for investment purpose only to the registered stockbrokers and not to any authorised person or associate of stockbrokers,” it said.

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