SEBI Bans Investment Advice On Digital Gold And Cryptocurrency




In an announcement made on October 21, the Securities and Exchange Board of India (SEBI) stated that investment advisors are prohibited from advising on unregulated instruments.

This effectively prohibits investment advisors from providing advice on cryptocurrencies, digital gold, and other unregulated products.

“It has come to the attention of the Securities and Exchange Board of India (SEBI) that some registered investment advisers are engaged in unregulated activity by providing a platform for the purchase, sale, and trading of unregulated products, including digital gold,” the market regulator stated.

It went on to say that providing advisory, distribution, execution, or implementation services in unregulated instruments does not comply with the provisions of Section 12(1) of the SEBI Act, 1992, which prohibits such activities.

In a statement, the SEBI stated that “investment advisers are hereby advised to refrain from engaging in such unregulated activities,” and that any dealing in unregulated activities could result in legal action under the SEBI Act, 1992.

 

What is Digital Gold, and how does it work?

Digital gold is a method of purchasing yellow metal that does not require the buyer to handle it physically. You can make a quick and simple purchase from the comfort of your own residence. It’s also secure because it’s backed by a Trustee who has been approved by the SEBI. The smallest amount that can be purchased or sold is one rupee. On weekends and holidays, you can buy and sell gold at any time of day or night, seven days a week, including holidays.

What is cryptocurrency, and how does it work?

Bitcoin, the world’s first cryptocurrency, was created with the goal of serving as a payment system for people who use the internet to conduct their transactions. We are able to move more quickly, at a lower cost, and with greater independence from the whims of any government or central bank. You can purchase cryptocurrencies on peer-to-peer networks and cryptocurrency exchanges such as Coinbase and Bitfinex, among other places. Always keep an eye out for transaction fees, as some of these exchangers charge exorbitant fees for even the smallest cryptocurrency purchases.

Earlier this month, the National Stock Exchange (NSE) issued an order to its members, which included stockbrokers, requiring them to cease selling digital gold on their platforms by September 10.

The directive was issued after the capital markets regulator discovered that some members were providing their clients with a platform to buy and sell digital gold, which prompted the directive.

Advisors on investment matters are now being warned to avoid engaging in such unregulated activities. Dealing in unregulated activities by Investment Advisers may result in disciplinary action under the Securities and Exchange Board of India Act, 1992, and the regulations promulgated under the Act.




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