SEBI Issues Alert on Fraudulent STT Notices and Risk-Free Account Services
Synopsis
SEBI warns investors about rising scams involving counterfeit securities transaction tax (STT) notices and misleading account handling services that promise risk-free profits. Learn how to protect yourself against these fraudulent schemes.
Key Takeaways
Beware of fake STT notices: Always verify notices claiming payments.
Use SEBI's official channels: Confirm communications via SEBI's website or official emails.
Engage only with registered intermediaries: Protect your investments by checking registration status.
Report suspicious communications: If in doubt, consult SEBI directly.
Utilize the 'SEBI Check' tool: Verify intermediaries' authenticity easily.
Mumbai, February 27 (NationPress) - The Securities and Exchange Board of India (SEBI), the capital markets regulatory authority, has raised an alarm regarding an increase in scams involving counterfeit securities transaction tax (STT) notices and misleading 'account handling' services that promise guaranteed profits without risk.
According to the regulator, con artists have been issuing fraudulent notices demanding payment for alleged unpaid STT liabilities, frequently utilizing fake SEBI letterheads, logos, and seals while misrepresenting their authority under the SEBI Act of 1992.
In a separate statement, SEBI cautioned investors about “Portfolio Management Service (PMS) providers and so-called expert fund managers” who assert that they can assist investors in generating risk-free profits in their demat or trading accounts.
These fraudsters take advantage of investors by exhibiting trades they have executed for other clients, claiming to have achieved significant profits, as noted by the regulator.
Additionally, SEBI clarified that STT is automatically collected by brokers during each transaction, as stipulated by the Finance Act of 2004, and that it does not send out demand notices regarding STT payments.
Investors are urged to verify any communication purportedly from SEBI. Official correspondence from SEBI will only originate from email addresses ending in @sebi.gov.in, and all enforcement actions can be found on SEBI’s official website. Online payments related to transactions, settlements, or recoveries should only be made through SEBI’s authorized payment gateway.
SEBI also highlighted cases of fraudsters impersonating SEBI officials and utilizing official letterheads, logos, and seals. “Fraudsters are posing as SEBI officials and reaching out to individuals using SEBI branding,” the statement indicated.
Investors should ensure they only engage with SEBI-registered intermediaries and utilize reputable trading applications, confirming the registration status of these entities on the official website.
Recently, SEBI launched the 'SEBI Check' feature, allowing investors to either scan a QR code or manually input the bank details of any SEBI-registered intermediary to verify the authenticity of a UPI ID or bank account.
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Point of View
It's critical to emphasize the importance of vigilance in the face of rising investment fraud. SEBI's alert serves as a reminder for investors to remain cautious and verify the authenticity of any communications or services related to their trading activities.
NationPress
10 Aug 2026
Frequently Asked Questions
What are fake STT notices?
Fake STT notices are fraudulent communications that claim to demand payment for outstanding securities transaction tax liabilities, often using forged SEBI branding.
How can I verify if my investment service is legitimate?
Always check if the service provider is registered with SEBI and use the official SEBI website to verify their registration status.
What should I do if I receive a suspicious notice?
Do not respond or make any payments. Verify the notice with SEBI directly and report the incident to the authorities.
How does SEBI collect STT?
SEBI does not send demand notices for STT. It is automatically collected by brokers at the time of each trade under the Finance Act, 2004.
What is the 'SEBI Check' mechanism?
The 'SEBI Check' mechanism allows investors to verify the authenticity of SEBI-registered intermediaries by scanning a QR code or entering bank details.
