Markets regulator Sebi has once again warned investors against dabba trading, calling it illegal and urging the public to remain alert and avoid dealing with entities offering such unauthorised trading services.In a statement issued on Monday, Sebi said, “It is reiterated that dabba trading is illegal, and Sebi is committed to safeguarding investor interests through regulatory enforcement, awareness, and coordination with law enforcement agencies. Investors are advised to remain vigilant and not to deal with any entity offering illegal trading services.”Dabba trading refers to off-market trades that take place outside recognised stock exchanges and regulatory supervision. According to Sebi, such activities violate provisions of the Securities Contracts (Regulation) Act, 1956, the Sebi Act, 1992, and the Bhartiya Nyay Sanhita, 2023, PTI reported.The fresh advisory comes after Sebi took serious note of an advertisement in a daily newspaper last week that promoted dabba trading. Following this, Sebi, along with the National Stock Exchange (NSE), initiated multiple actions.Sebi issued a formal communication to the newspaper expressing concern over the ad’s promotion of illegal trading and its potential to mislead investors.The regulator has also filed a complaint with the cyber police seeking legal action against the entity behind the ad and other involved parties. The matter has also been referred to the Advertising Standards Council of India (ASCI) to examine possible violations of advertising norms and take corrective steps.Separately, NSE issued an investor caution alert highlighting the risks of dabba trading and warning the public against dealing with the entities mentioned in the ad. The exchange reiterated that investors should only trade through Sebi-registered brokers and recognised stock exchanges.
