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RBI Deputy Governor Cautions Tech Companies On Unauthorised Trading Platforms
Deputy Governor Michael Patra highlighted the importance for technology companies to exercise caution with regards to unauthorised electronic trading platforms (ETPs) that are available for download
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During a press briefing on Thursday following the Reserve Bank of India's (RBI) monetary policy meeting, Deputy Governor Michael Patra highlighted the importance for technology companies to exercise caution with regards to unauthorised electronic trading platforms (ETPs) that are available for download. He emphasised that even if these platforms are on the central bank's alert list, they continue to pose a threat.
Deputy Governor Patra stated that the RBI maintains close interactions with enforcement agencies, as well as ministries such as the Ministry of Finance and the Ministry of Electronics and Information Technology. Ongoing actions are being taken, including raids on various platforms and the seizure of their assets.
To address this issue, the RBI recently updated its alert list, which includes 56 entities prohibited from engaging in foreign exchange activities under the Foreign Exchange Management Act, 1999 (FEMA) or the Electronic Trading Platforms (Reserve Bank) Directions, 2018.
The newly updated alert list includes the following unauthorised trading platforms: QFX Markets, 2WinTrade, Guru Trade7 Limited, Bric Trade, Rubik Trade, Dream Trade, Mini Trade, and Trust Trade. Importantly, the list also provides download URLs associated with these unauthorised entities. The availability of these URLs plays a significant role as experts have noted that taking down unauthorised trading platforms becomes challenging when such URLs are inaccessible.
Additionally, the RBI maintains a list of platforms authorised by the central bank to conduct transactions in eligible instruments such as securities, money market instruments, foreign exchange instruments, derivatives, and other similar instruments specified under the Reserve Bank of India Act, 1934.
Users who operate on unauthorised platforms are exposed to various risks, including fraud, financial loss, data leaks, misuse, theft, and cyberattacks. To safeguard against such risks, the RBI has warned users against engaging with these platforms, emphasising that doing so may render them liable for penal action under FEMA.