In a decisive step to strengthen investor protection in the digital era, the Securities and Exchange Board of India (SEBI) has intensified its campaign against online investment scams. Through formal communications with major social media platforms and internet search engine providers, SEBI has urged these digital giants to implement robust mechanisms that prevent the misuse of their platforms for fraudulent financial activities. This move comes amid a surge in online investment frauds, including fake trading apps, impersonation of registered entities, and deceptive investment schemes targeting retail investors. With millions of Indian investors engaging through digital channels, SEBI’s call underscores the urgent need for coordinated action between regulators, tech platforms, and the investing public.
A Global Call to Action
SEBI’s latest initiative aligns with the International Organization of Securities Commissions (IOSCO) statement issued on May 21, 2025, which emphasized the critical role of online platforms in mitigating financial harm to investors. IOSCO—an international body comprising market regulators—highlighted that technology companies and platform providers must take greater responsibility for ensuring their ecosystems are not exploited by bad actors. By echoing IOSCO’s recommendations, SEBI has reinforced India’s commitment to global best practices in investor protection and digital market regulation.
Key Measures Proposed by SEBI
To address the growing menace of fraudulent investment promotions and counterfeit trading platforms, SEBI has called upon digital intermediaries to prioritize and fast-track the following measures for the Indian market:
- Mandatory Advertiser Verification in the Securities Market Domain
SEBI has proposed a mandatory verification process to ensure that only SEBI-registered entities can advertise investment products and services on digital platforms. This step aims to curb the proliferation of fake financial advertisements that lure investors into fraudulent schemes. - Verified Status for Registered Intermediary Apps
SEBI has recommended introducing a distinct verification label for genuine trading and investment applications listed on app stores. This would allow investors to easily differentiate legitimate, regulated apps from fraudulent ones, enhancing safety and transparency in digital trading.
Together, these measures represent a proactive approach to building a safer digital financial environment—where investors can engage confidently, knowing that the platforms they use are accountable and secure.
Investor Advisory: Staying Vigilant Online
While SEBI continues its regulatory and enforcement efforts, it has once again urged investors to exercise extreme caution when investing through online platforms. Investors are advised to:
- Verify the registration status of entities before investing, by visiting SEBI’s Intermediaries Portal.
- Use only authentic trading applications of SEBI-registered intermediaries, verified at SEBI Investor Support.
- Use “Validated UPI Handles” (UPI IDs ending with “@valid”) of SEBI-registered investor-facing intermediaries and verify through the “SEBI Check” platform at https://siportal.sebi.gov.in/intermediary/sebi-check or via the Saarthi App.
A Collaborative Future for Digital Investor Safety
This initiative marks another milestone in SEBI’s ongoing mission to enhance market integrity and protect investors from digital fraud. By fostering collaboration between regulators and technology platforms, SEBI seeks to create a more transparent, accountable, and resilient digital financial ecosystem. As India’s capital markets continue to expand digitally, SEBI’s message is clear: safeguarding investor trust requires collective vigilance—from regulators, tech companies, and investors alike.