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What Are The Steps For Reporting To Trading Standards

Any area of business that involves the participation of human beings is bound to be vulnerable to fraud and activities guided by malicious intent, and the securities market is no exception. You may have read headlines about the Securities and Exchange Board of India (SEBI) banning different organisations and individuals from the securities market for the breach of trading standards and/or fraudulent activities.

If you wish to participate in the securities market in India, as a trader or an investor, then you must be well acquainted with what constitutes the trading standards in the country. In addition to this, you must also know which activities are red flags in trading, and how you can report them through the appropriate channels.

It is also important to open a trading account with a trustworthy depository participant and follow all the rules for trading applicable in India. You must also use only the best trading platforms for your trading activities.

What constitutes unfair trading practices in Indian stock trading?

The unfair trading practices in stock trading in India have been defined in the SEBI's Prohibition of Fraudulent and Unfair Trade Practices Regulations that had been passed in July 2003. These rules clearly describe what can be construed as fraud in stock trading. Here are the major activities that are part of the aforementioned regulations.

Concealment of material information;
Misrepresentation and/or miscommunication of any material information;
Manipulation of information to mislead buyers and sellers of stocks;
Making false promises vis-a-vis the purchase or sale of stocks and their prices;
Any attempt to manipulate stock prices;
Inadequate reporting of buy/sell transactions in the stock market;
Promising the trading of non-existent securities, etc.

How can you report the breach of trading standards in India?

If you find yourself faced with any unfair and/or fraudulent trading practice in the Indian stock market, you can raise a complaint with the Securities and Exchange Board of India or any of the stock exchanges operational in India. In order to make the complaint filing mechanism seamless, SEBI has a dedicated complaint cell named 'SEBI Complaints Redress System', also referred to as SCORES.

You can check out the official website or mobile application of SCORES and report any unfair trading practices that you are aware of.

To sum it up

Everyone who is a participant of the securities market in India carries the responsibility of reporting any practices that violate the trading standards prevailing therein. You can do so by filing an online complaint with the Securities and Exchange Board of India.