Recent investigations by the National Stock Exchange (NSE) have uncovered a worrying trend on Facebook, where certain pages are promoting an illegal form of securities trading known as ‘Dabba Trading.’ We feel it’s crucial to inform and protect our community against such fraudulent activities.
What is ‘Dabba Trading’?
‘Dabba Trading’ is a form of illegal and unregulated trading in securities. It involves traders making deals in securities which are not executed on any SEBI recognized stock exchange. This means:
There’s no official record of these transactions.
They evade market regulations and monitoring.
The risks of ‘Dabba Trading’
Unregistered Activity: Conducted by individuals or entities not registered with any regulatory body.
Cash-Based Transactions: These deals often involve cash, making them untraceable and risky.
No Settlement Guarantee: There’s a high risk of significant losses as trade settlements are uncertain and unsecured.
How to spot and avoid these?
Watch out for unregistered individuals: These schemes are typically run by entities not registered with any regulatory authority
Cash transactions: Deals are often conducted in cash, which lacks transparency and accountability. This is done to avoid paying taxes.
No guarantee of settlement: There is no assurance of trade settlements, exposing investors to significant financial risks.
NSE has released a list of identified Facebook accounts and links engaging in ‘Dabba Trading.’ We strongly advise you to review this list to stay informed and safe. Check the NSE Press Release here.