Dabba Trading : NSE
National Stock Exchange (NSE) issued a string of notices naming entities involved in “dabba trading”.
- Dabba Trading is a form of informal trading that takes place outside the purview of the stock exchanges.
- In this practice, traders bet on stock price movements without incurring a real transaction to take physical ownership of a particular stock as is done in an exchange.
- This results in gambling centred around stock price movements, which is illegal and unregulated.
- The broker’s profit equates the investor’s loss and vice-versa. The equations are particularly consequential during bull runs or bear market.
- It is recognised as an offence under Section 23(1) of the Securities Contracts (Regulation) Act (SCRA), 1956 and upon conviction, can invite imprisonment for a term extending up to 10 years or a fine up to ₹25 crore, or both.