SEBI warns against unsafe advice channels, reminds investors of existing protections

Financial literacy and investor awareness play critical roles in securing the economic well-being of individuals at all stages of life, as emphasized by Shri Tuhin Kanta Pandey, Chairman of SEBI, during a recent address at the Regional Seminar on Investor Awareness in Puducherry on November 29, 2025. The investment landscape in India is evolving rapidly, with a significant increase in the number of demat accounts, surpassing 21 crore, and unique investors totaling nearly 13.6 crore as of October 2025. This growth trend is particularly encouraging as it includes a growing number of young professionals and female investors, reflecting a positive shift from traditional savings towards more structured investment opportunities. The assets of the mutual fund industry in India have also exceeded Rs. 80 trillion, indicating a substantial market size and potential for growth and diversification.

Despite the promising expansion of the investment landscape, there is a pressing need for enhanced comprehension and awareness among investors. The Investor Survey 2025 has revealed a concerning knowledge gap, with only 36% of investors possessing moderate to high levels of market knowledge. Alarmingly, 62% of investors rely on advice from non-registered sources such as social media or friends, exposing them to various risks associated with online scams and fraudulent applications. To address this issue, SEBI has introduced several protective measures aimed at safeguarding investors and enhancing their understanding of market dynamics and risks.

Among the initiatives implemented by SEBI are the validated UPI handle framework, the SEBI Check for verifying intermediaries’ bank accounts, and the integration of holdings with Digilocker. Complaint redressal mechanisms have been significantly improved through the introduction of SCORES 2.0 and the SMART ODR system, with user satisfaction rates nearing 90%. In addition, SEBI has conducted more than 50,000 awareness programs across nearly 90% of districts in the fiscal year 2024-25. Collaborations with the Ministry of Panchayati Raj (MoPR) have also been initiated to provide training to approximately 2.5 lakh panchayat-level representatives, with the ultimate goal of fostering a culture of informed investors benefiting every household.

The focus on enhancing technology-driven protection mechanisms and aligning investor awareness initiatives with grassroots governance efforts through collaboration with MoPR underscores the importance of ensuring the security and capital growth of new investors in the market. These initiatives are vital for establishing a market environment that is both transparent and equitable as India aims to achieve sustainable financial development.

As part of these efforts, SEBI has introduced the SCORES 2.0 (SEBI Complaints Redressal System) and the SMART ODR (Online Dispute Resolution) mechanism to streamline investor complaint redressal processes. These platforms feature automatic routing, enhanced transparency in escalation procedures, and faster resolution timelines, all of which are designed to bolster investor confidence and trust in the market ecosystem.

In light of the significant number of investors currently relying on informal advice from sources like social media, a pertinent question for policy stakeholders is how SEBI will ensure that its new technology-based safety mechanisms are effectively communicated and utilized to protect investors from potential risks and scams. Ultimately, continued efforts to promote financial literacy, enhance investor awareness, and strengthen protective mechanisms are essential for building a resilient and secure investment environment in India that benefits all stakeholders.