If you have ever come across websites or online platforms offering shares of companies before they are listed on the stock exchange, SEBI has an important message for you.
The Securities and Exchange Board of India (SEBI) has once again cautioned investors against buying or selling securities of unlisted public limited companies through unauthorised electronic platforms and websites.
The regulator issued this warning after noticing that several platforms continue to facilitate such transactions despite not being recognised by SEBI.
What is SEBI concerned about?
Many investors are attracted to unlisted shares because they hope to participate in a company’s growth before a potential IPO. Shares of well-known companies often generate significant interest in the unlisted market.
However, SEBI has clarified that only recognised stock exchanges are authorised to provide platforms for raising capital and trading securities. Any platform facilitating transactions in unlisted securities without regulatory recognition falls outside SEBI’s framework.
Why does this matter to you as an investor?
When you invest through a recognised stock exchange, you have access to regulatory safeguards, grievance redressal mechanisms, and dispute resolution systems. If something goes wrong, there are established processes available to help protect your interests.
But, if you transact through unauthorised platforms, these protections may not be available.
According to SEBI, investors using such platforms cannot rely on investor protection benefits under SEBI’s jurisdiction, exchange-administered grievance mechanisms, or the online dispute resolution system operated by exchanges and depositories.
What should you do?
Before considering any investment opportunity involving unlisted shares, it is important to verify whether the platform involved is recognised and authorised.
SEBI has also advised not to share sensitive personal information on such platforms, as they operate outside the regulatory framework designed to safeguard investors.
Source: Transaction in Securities of Unlisted Public Limited Companies on various Platforms 17-June-2026.
