Sebi warns investors against unauthorised PMS providers promising high returns through social media
SEBI said that these phoney entities are mobilising money in smaller amounts and are assuring returns through false promises.
SEBI news: In a notification, the Securities Exchange Board of India (SEBI) has cautioned investors to not fall for hoax schemes by unregistered Portfolio Management Services. SEBI said that there are unregistered entities who are luring customer with a promise of high returns, through pamphlets and social media platforms. SEBI further said that these phoney entities are mobilising money in smaller amounts and are assuring returns through false promises.
“It has come to the notice of SEBI that some entities are collecting money from the public claiming to provide Portfolio Management Services. These entities have been luring the public, with a promise of high returns, through pamphlets and social media platforms. It is observed that in such schemes, the entities have been mobilising money in relatively smaller amounts and promising assured returns. Some of the entities have names similar to that of SEBI registered intermediaries, misleading the public, as though the fund raising is genuine and done by entities registered with SEBI,” the notification read.
Clarifying the fact that SEBI registered intermediaries including Portfolio Managers cannot offer products with assured or fixed return on investment SEBI said, “SEBI registered intermediaries including Portfolio Managers (who manage Portfolio Management Schemes) cannot offer products with assured or fixed return on investment. Many such unauthorised schemes are run like Ponzi schemes without any real investment made in the securities market.”
Indraprastha Medical Corp stock hits lower circuit; Apollo Hospitals trades in green amid allegations of kidney transplant malpractices
300% Dividend: Hindustan Zinc declares second interim dividend - Check record date and other details
Traders' Diary: Buy, sell or hold strategy on Birlasoft, JK Tyre, Coromandel International, Vedant Fashions, Blue Dart, over a dozen other stocks today
BCL Industries’s subsidiary wins Rs 228 crore order for supply of Ethanol from state-run BPCL, HPCL, Indian Oil
According to SEBI (Portfolio Managers) Regulations, 2020, a Portfolio Manager shall be a body corporate, registered with SEBI and shall have a contract/agreement with a client to undertake management or administration of a portfolio of securities or funds of the client. Further, a Portfolio Manager cannot accept funds or securities worth less than rupees fifty lakh from the client and cannot promise any guaranteed or assured return, either directly or indirectly.
SEBI has advised investors to do proper due diligence before trusting their money in such unauthorised schemes.