Srinagar: Jammu and Kashmir Bank has issued a public advisory warning investors and the general public against dealing with so-called “opinion trading platforms,” following a recent communication from the Securities and Exchange Board of India (SEBI).
According to SEBI, these platforms allow users to trade or enter into arrangements where payouts depend on the outcome of a yes/no proposition regarding an event. Such trading, the advisory notes, does not fall under SEBI’s regulatory purview since it does not qualify as securities trading.
J&K Bank highlighted that opinion trading platforms often mimic investment platforms by using terms like profits, stop loss, and trading, misleading participants into believing they are regulated investment options. However, the bank clarified that no investor protection mechanisms under securities law apply to such participation.
The advisory further warned that none of these platforms can qualify as recognized stock exchanges, nor are they registered or regulated by SEBI. As a result, any trading of securities on such platforms is illegal, and operators could face regulatory action. Recognized stock exchanges have also been advised to initiate measures against violations.
“In this case, investors and participants are made aware that none of the investor protection mechanisms shall be available as their trades will not be on a recognized stock exchange,” the notice said, adding that the aim was to create wider public awareness about the risks of opinion trading.
