Beware of advisors not registered with SEBI

The capital market regulator Securities and Exchange Board of India (Sebi) has cautioned investors against taking investment decisions based on the advice rendered by entities not registered with it. The regulator has advised investors to verify whether 'it is registered as portfolio manager under the Sebi (Portfolio Manager) Regulations' through its website if the individual or entity is rendering investment advice.

The regulator decided to caution investors after receiving complaints against individuals who have been giving stock specific advice to investors for certain consideration.

Sebi has also received complaints against certain individuals and entities who were giving investment advice through the print media or by sending bulk SMS messages even without entering into any contract or arrangement or without any consideration.

Sebi observed that rendering such investment advice is an attempt to influence the market price and lure investors. “Investors are therefore advised to take adequate care and carry out necessary due diligence before acting on the basis of such advice/communication,” stated Sebi in a press release on Friday.