Sebi warning puts opinion trading platforms in a bind

OPINION TRADING PLATFORMS, which allow users to wager on the outcome of future events, and were largely operating under the radar in India, find themselves in the middle of an unwanted spotlight, courtesy a strong warning issued by the markets regulator.

- FE BUREAU

The Securities and Exchange Board of India (Sebi) on Tuesday issued a strong warning to the public against using such platforms, saying they operate outside its regulatory oversight and offer no protection to investors under securities laws. In an advisory, Sebi said some online platforms allow users to trade on the outcomes of yes-or-no events. The payout depends on whether a certain event happens or not. For example, users may place trades on whether a sports team will win, or if a particular political decision will be taken.

These platforms often use financial terms like 'profits', 'stop loss' and 'trading', giving the impression that they are legitimate investment platforms, Sebi added.