Markets regulator SEBI warned investors against participating in unregulated web portals offering transactions in securities, including derivatives, which are executed on the terminal of overseas exchanges.

SEBI has observed that investors in India are being offered services by various firms through online web portals to trade in a variety of financial products, including various types of derivatives, which are apparently traded on overseas platform or exchange, it said in a statement.

These firms are operating from overseas, but providing services to the Indian residents.

In order to attract clients, these firms through various means of communications such as electronic messages, blogs, advertisements, websites, E-mails, leaflets, apps and calls, among others, offer free online registration without complying with the basic Know Your Customer (KYC) procedures and often offer high level of leverage, low brokerage and other incentives for trading on such overseas platform.

According to the SEBI, such firms or web-portals are not supervised by any regulatory body in India.

Further, the inherent complexity of the products offered by such entities "may not suit the risk profile of the investors and their excessive leverage can result in significant losses to investors," it noted.

"All investors are cautioned to avoid participating in such unregulated web portals/entities offering transactions in securities (including derivatives) which are executed or undertaken on the terminal of foreign exchanges/ platforms," the Securities and Exchange Board of India (SEBI) said.

In case of any kind of claim relating to such participation or enforcement of any agreement, SEBI said that the dispute resolution mechanism as well as investor grievance redressal mechanism administered by stock exchanges is not available to investors.#casansaar (Source - PTI, MoneyControl)