The National Stock Exchange of India Ltd (NSE) has issued a stern investor advisory, cautioning the public against participating in 'dabba' trading and other illegal trading services. The exchange specifically named two entities, Legendry Traders and Let's Trade India, for allegedly engaging in prohibited activities through various digital platforms.
Entities Under Scrutiny
According to the NSE's advisory, Legendry Traders is accused of providing securities market tips and offering account handling services to investors via a Telegram channel. Let's Trade India, operating across Telegram, Instagram, YouTube, associated websites, and a specific mobile number (9773687281), is alleged to be facilitating 'dabba' or illegal trading services. The NSE has also lodged a police complaint regarding these activities.
What is 'Dabba' Trading?
'Dabba' trading is an illicit and unregulated form of securities trading. In this practice, traders place bets on security prices without the actual trades being executed on any official, SEBI-recognised stock exchange. Instead, these transactions are settled internally by the 'dabba' operator, completely bypassing regulated platforms and regulatory oversight.
A critical risk of 'dabba' trading is the lack of a grievance redressal mechanism. Since trades are not processed through official stock exchanges, investors have no recourse to regulatory bodies in case of disputes or fraud. This makes 'dabba' trades inherently unsafe and offers no benefits of guaranteed transactions.
NSE's Investor Advice
The NSE strongly advises investors to exercise extreme caution and refrain from subscribing to any scheme or product that promises indicative, assured, or guaranteed returns in the stock market. Such offerings are prohibited by law. Furthermore, investors are urged not to share their trading credentials, including User IDs and Passwords, with any third party.
The exchange emphasized that entities like Legendry Traders and Let's Trade India are not registered as members or authorized persons of any registered NSE member. Investors can verify the credentials of legitimate stock brokers and their authorized persons using the "Know/Locate Your Stock Broker" facility available on the NSE website.