NSE warns against 3 ‘illegal’ entities offering ‘assured returns’ in stock market

The National Stock Exchange (NSE) today issued a warning against three persons or entities who have been accused of running an "illegal guaranteed return scheme" for amateur investors.

In two separate warning statements, the NSE notified a person named "Veena", who's associated with an entity named "Algo Master" and operating through mobile numbers "8530550095" and "8530990063". The person, as per NSE, is providing assured returns on investment in the stock market and is also offering to handle the trading account of investors by asking them for their credentials.

The stock exchange has also named two more, 'Ankita Mishtra' and 'Vishal', operating through mobile number 8237576347, for promising assured returns in the stock market.

The NSE has said these persons or entities are neither registered nor authorised registered members of the National Stock Exchange of India Ltd.

"The investors are cautioned and advised not to subscribe to any such scheme or product by any person or entity offering indicative or assured returns in the stock market as the same is prohibited by law. Further, investors are advised not to share their trading credentials such as user id or password with anyone."

The NSE said participation in such prohibited schemes is at investors' own risk, cost and consequences such as schemes are neither approved nor endorsed by the exchange.

The investors may note that for any kind of disputes relating to such prohibited schemes, none of the following recourses will be available to investors: benefits of investor protection under the exchange's jurisdiction; exchange dispute resolution mechanism; and investor grievance redressal mechanism administered by the exchange.

Earlier this month, the NSE issued a warning, cautioning investors against illegal trading platforms, which offer ‘dabba trading’ with guaranteed returns. Dabba trading in India is an illegal form of trading in shares that allows investors to buy and sell stocks outside the stock exchanges.

The NSE warning had come after India’s biggest stock exchange found that the entities—Shri Parasnath Commodity Pvt. Ltd., Shri Parasnath Bullion Pvt. Ltd., Fary Tale Trading Pvt. Ltd., and Bharat Kumar (associated with Trade with Trust)—were providing a "dabba or illegal trading platform" with assured returns. Investors were cautioned and advised by the stock exchange not to subscribe to any such scheme or product offered by any person or entity offering guaranteed returns in the stock market.

Before that, the market regulator Securities and Exchange Board of India (SEBI) had issued a code of conduct to be followed by investment advisers and research to crack down on misleading ads. SEBI prohibited investment advisers from using superlative terms such as ‘Best’, ‘No. 1’, ‘Top adviser’, ‘Leading’, ‘One of the best amongst market leaders’, among others in any form of advertisement.