“It has come to the attention of SEBI that certain fraudsters have been issuing notices demanding compliance with the Securities Transaction Tax (STT) under the Finance Act, 2004,” the Securities and Exchange Board of India (Sebi) said in a statement.The regulator said investors are informed that these notices have not been issued by Sebi.
“It is informed that STT is levied on every purchase and sale transaction of securities executed on stock exchanges and the tax is collected by the broker,” it added.
Sebi clarified that it neither issues notifications to transfer STT amounts nor consults with the Reserve Bank of India (RBI) in this regard.
The regulator also warned of cases of fraudsters impersonating Sebi officials or misusing the market watchdog’s logo, seal or letterhead to dupe investors. Such individuals have been sending forged notices, emails or notices in the name of Sebi, urging gullible investors to transfer money into these fraudulent accounts, leading to financial losses, according to the release.
“…the public is urged to exercise caution and verify the authenticity of letters/communications seeking information or payment on behalf of Sebi,” the statement said.
In a separate press release on Thursday, Sebi warned investors against fraudsters posing as account managers or fund managers promising risk-free gains in the stock market.
Sebi said these entities claim to offer portfolio or account handling services, often demanding access to investors’ trading account credentials, while charging a share of the profits. However, the losses are fully borne by investors, the regulator said.
The regulator explained that such persons are not registered with Sebi and are operating outside its jurisdiction. It urged investors not to trust the claims of such account handlers/fraudsters and not share their account details with anyone.
“Investors are advised to verify the status of registration of entities with Sebi… before investing and to transact only through authentic trading apps of Sebi registered intermediaries,” the regulator said.
The market watchdog said the advice is aimed at protecting investors from the fraud and scams carried out by unregulated entities.
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