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Unauthorised investment schemes are fraudulent, unfair: SEBI

all activities of money mobilisation through unauthorised Collective Investment Schemes (CIS) would face stronger penalties, SEBI said

August 13, 2013 11:05 IST | India Infoline News Service
To stop growing instances of lay investors getting defrauded by money pooling schemes, SEBI (Securities and Exchange Board of India) has decided to declare illegal mobilisation of funds as a "fraudulent and unfair trade practice".

“The Board has approved the proposal to declare illegal mobilization of funds without obtaining a certificate under the SEBI (Collective Investment Schemes) Regulations, 1999 as a fraudulent and unfair trade practice, SEBI said in its board meeting in Mumbai on Monday.

It has been decided to amend the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003, accordingly. This amendment has been made to impose deterrent adjudication penalties on unregistered CIS entities mobilizing money, SEBI said.

Following Monday's decision, all activities of money mobilisation through unauthorised Collective Investment Schemes (CIS) would face stronger penalties prescribed under the revised SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations.

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