NSE lifts lid on dabba trading,tippers

Exchange has issued warnings to over 20 entities using ‘mystery shoppers’, high-tech surveillance
KHUSHBOO TIWARI The entities against which cau-
Mumbai, 10 May tion notices have been issued in the
past few weeks include dabba trading
ew-age technology tools and operators, people offering guaran-
N “mystery shoppers’ are help- teed-return schemes, and those giv- > Dabba traders take ! > Al tools, increased
ing the country’s top bourse ing stock tips or recommendations positions outside
|
surveillance of
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stay ahead of the curve against dabba without any registered investment
stock exchanges — |
social media
(box) trading platforms and entities advisory licence. In certain cases, the |
an illegal practice | deployed to track
doling out unsolicited investment exchange has registered police com-
tips. In the past month, the National plaints as well. ना
> Tax evasion, | players
Stock Exchange (NSE) has issued Over the past year, the NSE has liberal margin | > Telegram, Twitter,
close to two dozen warnings and been examining information or tips requirements : and chat groups
advisories against such activities. received on unauthorised or illegal major reasons for J under scrutiny
“We saw a rise of dabba trading activities, such as the collection of participants
or illegal trading platforms after the deposits assuring fixed or guaranteed > Taking help of
pandemic. Since then, we deployed returns. In many cases, investors > NSE examining tips [ ‘mystery Shoppers’
various artificial intelligence tools were found to be sharing user iden- received on | to pose as decoy
and increased surveillance of social tification and passwords relying on unsolicited stock | Customers or
media platforms. The market intel- unsolicited messages circulating on recommendations, | investors to
ligence and investigation team is social media and chat groups, where assurance of unearth illegal
extensively tracking platforms such investors were lured with false prom- guaranteed returns 1 scheme
as Telegram, Twitter and individuals ises ofguaranteed or high returns by
promoting illegal schemes on social investing in various schemes, includ-
ILLUSTRATION: BINAY SINHA
media,” says an executive. ing option contracts.
“Our teams are engaging with Meanwhile, dabba trading oper- trades are typically done among future trades,” says Arun Kejriwal, While the Securities and
mystery shopping agencies to reach ators conduct trades outside the closed-knit groups to avoid default founder, Kejriwal Research & Exchange Board of India has been
localised circles, attend webinars, stock exchange platform to evade risk. Investment Services. clamping down on illicit trading
meet representatives of these taxes. Such platforms had flourished “Since dabba traders are not With several caution notices, the activity, stock exchanges — seen as
entities, and visit offices. The action after the pandemic amid a spurt in within the ambit of regulations, they exchange has warned investors that first-level regulators— have taken a
is being taken after due process of trading interest during the lock- are one-sided games and have no dis- their participation in such illegal lot of onus upon themselves, say
investigation,” adds the executive. downs. pute resolution. The participants are platforms is at their own risk, cost, market observers.
‘Mystery shopping’ is a concept Depending upon the price move- made to believe that the die is loaded and consequences. In one of the notices, the NSE
used in the retail sector to gauge Cus- ment, the participant either has to in their favour as there is no margin “Often the operators ask for just 1 noted that violations of certain
tomer service experience. In the mar- pay money or makes a profit. maintenance or questions sought on per cent margin of the total volume. norms under the Securities Contracts
ket context, an individual poses as a Industry experts say that usually tax entry. But later, the operators build So while the order could be for 5,000 (Regulation) Act can be punishable
retail customer to unearth an illegit- avoidance and liberal margin pressure through wrongful means to shares, only 50 are traded and with imprisonment extending up to
imate scheme and help in research requirements lure investors into such recover money or when the investor reflected on the exchanges as vol- 10 years or with a fine up to
and investigation. illegal platforms. However, these has to collect money, it is Kept for ume,” says Kejriwal. ₹25 crore or both.