SEBI Warns Investors to Stay Alert about Fake STT Notices and ‘Account Handling’ Scams
Moneylife Digital Team 27 February 2026
Market regulator Securities and Exchange Board of India (SEBI) has warned investors about a surge in fraud involving fake securities transaction tax (STT) notices and so-called ‘account handling’ services that promise risk-free profits in the stock market.
 
In a release, SEBI says it has come across several instances where fraudsters have circulated forged notices demanding payment of outstanding STT dues. These fake communications misuse SEBI letterhead, logo and seal, and falsely claim to be issued under powers conferred by the SEBI Act, 1992. Investors are being asked to remit money towards alleged STT liabilities, often with claims that SEBI is coordinating with other authorities such as Reserve Bank of India (RBI).
 
SEBI has clarified that these notices are completely fake. STT, which is levied under the Finance Act, 2004, is automatically charged on every purchase and sale of securities executed on stock exchanges and is collected by brokers at the time of the transaction. The regulator does not issue notices demanding STT payments from investors, nor does it coordinate with RBI for such collections. According to SEBI, gullible investors have already lost significant sums by believing these fraudulent communications and transferring money to scam accounts.
 
The regulator has advised investors to independently verify the authenticity of any communication claiming to be from SEBI. All enforcement actions are published on SEBI’s official website, and any online payments towards orders, settlements or recoveries can be made only through SEBI's designated payment gateway. SEBI has also reminded investors that official email communications are sent only from email IDs ending with “@sebi.gov.in” and contact details and office addresses of SEBI officials are publicly available on its website.
 
In a separate release, SEBI cautioned investors against stock market scams being carried out through ‘account handling’ services. These fraudsters present themselves as expert traders, portfolio management service (PMS) providers or fund managers who claim to generate assured or risk-free profits. Typically, they ask investors to commit a minimum capital amount and promise to share profits in return for a fee based on a percentage of the capital.
 
To lure victims, these operators showcase alleged past trades and inflated profit claims. They insist that investors share their trading or demat account credentials, allowing the fraudsters to operate the accounts directly. Any profits or losses from such trades are credited or debited to the investor’s account, but while the fraudster demands a share of the profits, losses are borne entirely by the investor.
 
SEBI has emphasised that such account handlers are not registered with the regulator and operate completely outside its regulatory framework. Investors have been strongly advised not to share their account credentials with anyone and to deal only with SEBI-registered intermediaries using authentic trading applications. The registration status of intermediaries can be verified on SEBI’s official website, and investors should transact only through authorised platforms.
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