NSE warns investors against illegal 'dabba trading' platform TradeInn, files police complaint

The National Stock Exchange (NSE) on Thursday cautioned investors against dealing with an entity named TradeInn, alleging that it is providing illegal "dabba trading" services without being registered with the exchange. The bourse said it has lodged a police complaint and urged investors to avoid schemes offered by unregistered entities operating in the securities market.

In a press release, the NSE said it had received information about a person identified as "Disha", claiming to be associated with TradeInn, allegedly operating through mobile number 7974092256 and the website www.tradeinn.in.

The exchange clarified that neither the individual nor the entity is registered as a trading member or an authorised person of any registered NSE member.

What is dabba trading?

Dabba trading refers to illegal trading in securities conducted outside recognised stock exchanges. Such trades are executed off-market, allowing participants to speculate on stock price movements without routing transactions through the official exchange platform.

Since these transactions are not recorded on the exchange, investors do not receive regulatory protection and remain exposed to significant financial and legal risks.

NSE asks investors to verify brokers

The exchange advised investors not to subscribe to any scheme or product offered by unregistered persons or entities in the stock market, noting that such activities are prohibited under law.

To help investors verify the authenticity of intermediaries, NSE said they can use its "Know/Locate Your Stock Broker" facility available on its website to check whether a broker or authorised person is registered with the exchange.

The bourse also reiterated that participation in illegal trading platforms is entirely at an investor's own risk and that such platforms are neither approved nor endorsed by the exchange.

Police complaint filed

NSE said it has lodged a police complaint against the alleged illegal trading operation.

The exchange also highlighted the legal consequences associated with dabba trading. Under Section 23(1) of the Securities Contracts (Regulation) Act, 1956 (SCRA), violations of specified provisions of the Act can attract imprisonment of up to 10 years, a fine of up to ₹25 crore, or both.

Further, offences punishable under Section 23 are cognisable under the Bharatiya Nagarik Suraksha Sanhita, 2023, enabling investigation by state law enforcement authorities.

Apart from securities law violations, dabba trading may also attract provisions under Sections 316, 318 and 61 of the Bharatiya Nyaya Sanhita, 2023, the exchange said.

No investor protection available

NSE warned that investors trading through illegal platforms cannot avail themselves of the protections available under the exchange's regulatory framework.

These include the Exchange Dispute Resolution Mechanism and the Investor Grievance Redressal Mechanism administered by the exchange.

The bourse advised investors to deal only with SEBI-registered brokers and authorised persons to safeguard their investments. It also encouraged market participants to verify the credentials of intermediaries before opening trading accounts or investing through online platforms.

The exchange regularly issues investor advisories highlighting unauthorised entities and said a consolidated list of such alerts is available on its official website.