The Securities and Exchange Board of India (SEBI) issued a public caution on “opinion trading platforms”, which allow users to trade arrangements with payouts linked to yes or no outcomes of underlying events. SEBI said such activity generally falls outside its regulatory perimeter because what is traded is not a security, meaning securities-market investor protection mechanisms do not apply. SEBI noted that some platforms are designed to resemble investment platforms by using terms such as profits, stop loss and trading. It added that these platforms cannot qualify as recognized stock exchanges and are neither registered nor regulated by SEBI, and warned that any trading of securities on them would be illegal where the “opinions” traded qualify as securities. In such cases, SEBI said the platforms could face action for violations and advised recognized stock exchanges to initiate appropriate action, while reiterating that investor protection mechanisms would still not be available because trades would not be on a recognized stock exchange.

Original source View in tracker