Markets regulator Securities and Exchange Board of India (SEBI) asked investment advisers to abstain from dealing in unregulated products such as digital gold. The regulator informed that engaging in any unregulated activity involving distribution, advisory and implementation services pertaining to digital gold would put them in contravention of the SEBI Act, 1992.
"Undertaking such unregulated activity including dealing (i.e., advisory, distribution and execution/ implementation services) in digital gold by Investment Advisers is not in accordance with the provisions of Section 12(1) of the SEBI Act, 1992 read with the SEBI (Investment Advisers) Regulations, 2013," SEBI's circular stated.
Earlier in August, the National Stock Exchange directed its members, including stockbrokers to discontinue the sale of digital gold on their platforms by September 10. The direction came after the markets regulator noted that certain members are providing a platform to their clients for buying and selling digital gold. SEBI informed the exchange about its observations in a letter dated August 3.
The SCRR norms restrict members from engaging, either as principal or employee, in any business other than that of securities or commodity derivatives, except as a broker or agent, not involving any personal financial liability.
(With inputs from PTI)
