The Securities and Exchange Board of India (Sebi) has cautioned investors against fake notices demanding payment of securities transaction tax (STT).
In a notice issued on Thursday, the market regulator said that some entities were forging Sebi’s letterhead and demanding payments of outstanding STT amounts under the Finance Act, 2004, by exercising powers conferred under the Sebi Act, 1992.
The regulator clarified that it does not issue notices to investors for the remittance of STT, nor does it coordinate with the Reserve Bank of India (RBI) for such collections. STT is automatically levied on every purchase and sale of securities executed on stock exchanges and is collected directly by brokers, the regulator said.
The market watchdog has also observed cases where entities impersonate Sebi officials, misuse names and designations, and create fake email IDs resembling those of the regulator.
On 24 February, the National Stock Exchange issued a similar caution against entities using Sebi’s letterhead and demanding payments of STT.
“NSE cautions investors to protect themselves from fraudsters and remain vigilant while dealing with communications fabricated to have been sent by Sebi officials and senders seeking payment on behalf of Sebi,” said the NSE notice.
Separately, Sebi flagged another growing scam involving “account handling” services. In these schemes, individuals portray themselves as experts in managing trading accounts, portfolio management service (PMS) providers or fund managers, promising risk-free profits.
These operators typically specify a minimum capital requirement and demand a share of the profits generated from trades executed in the investor’s demat or trading account. To build trust, they showcase successful trades executed for other clients. Investors are then persuaded to share their trading credentials, allowing them to operate the account directly. While profits, if any, are shared, losses are borne entirely by the investor.
“Investors are advised to not trust claims of such account handlers/ fraudsters and refrain from sharing their account credentials with anyone. These account handlers/ fraudsters are not registered by SEBI and do not fall under the purview of SEBI,” the regulator said.
