Mumbai, Apr 30 (UNI) The Securities and Exchange Board of India (SEBI) has cautioned the public against engaging with so-called 'Opinion Trading Platforms', warning that these platforms are neither recognised nor regulated under the current securities market framework.

In a press release issued here on Tuesday, the capital markets regulator noted that several such platforms allow users to trade or enter into arrangements where payouts depend on the outcome of a 'yes/no' proposition, based on whether a certain event occurs or not.

SEBI stated that some of these platforms employ financial market terminologies such as "profits", "stop loss", and "trading", which may mislead users into believing they are legitimate investment platforms. However, the regulator clarified that such opinion-based trades do not qualify as securities and, hence, fall outside SEBI’s regulatory purview.

"Investors/participants should be aware that no investor protection mechanism under securities market purview shall be available for such investment/participation," the regulator said.

Further, SEBI underlined that these platforms cannot be considered as recognised stock exchanges and are not registered with the regulator. Therefore, if any opinions traded on these platforms qualify as securities, such trading would be illegal and could attract penal action.

Recognised stock exchanges have been advised to take appropriate action against such violations, SEBI said, reiterating that trades on these unauthorised platforms will not be entitled to any investor protection mechanisms. UNI BDN CS