Haryana cautions users against ‘opinion trading platforms’

The Haryana Home Department today issued a caution against the rising trend of "opinion trading platforms". These platforms enable the users to trade or enter into arrangements where the payout is dependent on the outcome of a yes-or-no proposition regarding the occurrence or non-occurrence of the underlying event, which has drawn serious concern from both state and central authorities.

Giving this information here today, Sumita Misra, Additional Chief Secretary, Home Department, said that the issued advisory followed a detailed communication from the Securities and Exchange Board of India (SEBI), highlighting the risks and legal ambiguities surrounding such platforms.

SEBI Chairman Tuhin Kanta Pandey in a letter addressed to the state government warned that these platforms often mimic legitimate investment services by using financial terminology such as "profits", "stop loss" and "trading", thereby misleading users into believing they are engaging in regulated securities trading. "These platforms are designed to resemble investment platforms, using terms closely associated with securities trades to create a false sense of legitimacy," the SEBI communication stated.

Misra emphasised that while these platforms might appear innovative, they were potentially operating outside the bounds of legal and regulatory frameworks. "Any trading of securities on these platforms, if the traded opinions qualify as securities, is illegal and akin to illegal trading (dabba trading)," she stated, referencing the term used for unregulated trading.

Misra stated that the Haryana Government had directed law enforcement agencies, including the Director General of Police, to take appropriate action under the Haryana Prevention of Public Gambling Act, 2025, and to consider relevant provisions of the Bharatiya Nyaya Sanhita (BNS) 2023 and Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023. These laws provide the legal basis for prosecuting entities that engage in unauthorised financial activities, including illegal securities trading.

She further said that SEBI further clarified that opinion trading does not fall under its regulatory purview as the instruments traded were not classified as securities. Consequently, investors participating in such platforms are not protected by any investor-safeguard mechanisms available in regulated markets. "Investors and participants should be aware that no investor-protection mechanism under securities market purview shall be available for such investment or participation," the SEBI advisory warned.

The Ministry of Finance has also classified such activities as violations of the Securities Contracts (Regulation) Act, 1956, particularly Sections 13, 16, 17, and 19. These violations are cognisable offenses and may be investigated under the new criminal codes introduced in 2023, with penalties under Sections 406, 420 and 120-B of the BNS-2023.