Corporate Update | SEBI Cautions Investors on Transactions in Securities of Unlisted Public Limited Companies Through Unauthorized Platforms 

The Securities and Exchange Board of India (”SEBI”), through Press Release No. 32/2026 dated 17 June 2026, has issued an investor advisory cautioning against transactions in the securities of unlisted public limited companies through unauthorized websites and electronic platforms. 

The advisory follows SEBI’s observation that certain online platforms are facilitating transactions in unlisted securities despite not being recognised stock exchanges or SEBI-registered intermediaries. Such transactions fall outside SEBI’s regulatory framework and do not attract the investor protection mechanisms available under the securities laws. 

Key Clarifications 

SEBI has clarified that: 

• Certain electronic platforms are facilitating transactions in securities of unlisted public limited companies without operating as recognised stock exchanges or registered intermediaries. 

• Transactions executed through such platforms are not regulated by SEBI and remain outside its supervisory and enforcement framework. 

• Investors transacting through these platforms may not be entitled to the benefit of SEBI’s investor protection and grievance redressal mechanisms in the event of disputes, fraud, or financial loss. 

• Investors are advised to undertake appropriate due diligence and verify the regulatory status of any platform or intermediary before dealing in unlisted securities. 

Practical Implications 

The advisory serves as a timely reminder that while investments in unlisted securities continue to attract increasing investor interest, the mode through which such transactions are executed is equally significant. Investors, family offices, private equity participants, and market intermediaries should ensure that transactions are undertaken through legally compliant and appropriately regulated channels. 

The press release also underscores the importance of conducting legal and regulatory diligence before participating in transactions involving unlisted securities, particularly where transactions are facilitated through digital platforms that may not fall within SEBI’s regulatory perimeter. 

Key Takeaways 

• Verify whether the platform or intermediary is recognised or registered with SEBI before transacting. 

• Exercise heightened diligence while investing in securities of unlisted public limited companies. 

• Transactions undertaken through unauthorized platforms may expose investors to legal, operational, and financial risks without access to SEBI’s regulatory safeguards. 

• Regulatory compliance remains a critical consideration alongside commercial evaluation in private market transactions.