Online broking firm Zerodha’s co-founder Nithin Kamath on Saturday explained why his platform does not offer cryptocurrencies, US stocks, digital gold or unlisted private companies.
Taking to Twitter, Kamath said that unregulated items in stock market are not the best way to buy. “When you are regulated, everything is normally black & white. People keep asking me why don’t we offer crypto, unlisted private companies, US stocks, digital gold — which we anyways didn’t sell because it’s not the best way to buy gold, and more.”
When you are regulated, everything is normally black & white. People keep asking me why don’t we offer crypto, unlisted private companies, US stocks, digital gold — which we anyways didn’t sell because it’s not the best way to buy gold, and more. Here’s why 👇 pic.twitter.com/XGinZ8mDSM— Nithin Kamath (@Nithin0dha) October 23, 2021
Kamath’s comments came a day after markets regulator Sebi asked investment advisers to refrain from dealing in digital gold, which is an unregulated product.
Earlier, Sebi had noted that some registered investment advisers are engaged in unregulated activity by providing a platform for buying, selling or dealing in unregulated products including digital gold.
“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 the Sebi Act, 1992 read with the Sebi (Investment Advisers) Regulations, 2013,” the regulator said in a statement.
It further said any dealing in unregulated activities by investment advisers may entail action under the Sebi Act and regulations framed thereunder.
In August, the National Stock Exchange (NSE) had directed its members, including stockbrokers, to discontinue the sale of digital gold on their platforms by September 10.
The direction came after the capital markets regulator noted that certain members are providing a platform to their clients for buying and selling digital gold.
Sebi, through a letter dated August 3, informed the exchange that the said activity is in contravention of Securities Contracts (Regulation) Rules (SCRR), 1957, and the members should refrain from such dealings.
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.
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