Capital markets regulator Securities and Exchange Board of India on Tuesday cautioned investors against placing money with unregistered entities promising assured or exceptionally high returns on investments. This cautionary statement came after the Sebi observed a rising trend of unscrupulous entities and online platforms that falsely claim to be registered with the regulator as intermediaries.
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Investment Caution
While investing in the securities market, investors have been asked to conduct due diligence, verify the registration status of any entity claiming to be a Sebi-registered intermediary, and also verify enforcement action taken by the regulator against any entity.
“Investors should be cautious of any entity that promises assured or exceptionally high returns. The principle of ‘higher returns come with higher risks of losing your money altogether’ holds true in the securities market,” Sebi said in a statement.
It further said that investments offering high returns usually involve high risk, including fraud risk, and there can be no guarantees of assured returns in the securities market.
These entities often entice the general public by showcasing fake certificates purportedly issued by Sebi and promising or implying assured, high returns on investments, the regulator noted.
Consequently, Sebi has cautioned investors against placing their money with any entity based on such claims.
What Investors Need To Know Before Investing Money?
- Verify registration: Only invest with legitimate and regulated entities.\
- Check track record: Research past performance and investment strategies.
- Read the fine print: Understand fees, risks, and potential downsides
Consider consulting a financial advisor for personalised guidance based on your situation.
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