Have you recently opened a demat account, excited to begin your trading journey, only to start receiving calls or messages from people offering to trading account handling with profit sharing services?
If yes, then you must stay alert. What appears to be a shortcut to wealth is often a trap that could cost you your entire capital.
Let’s get into the details to understand how this works, why it’s illegal, the consequences involved, and what steps you can take if you’ve already been trapped.
Trading Account Handling with Profit Sharing India
Since 2020, around 14 crores demat accounts have been opened, and among those, around 5 crores accounts are active in the share market. Now this accelerated growth post covid is due to easy online onboarding, widespread smartphone usage, and bull-market enthusiasm.
When every business was facing a tough time in COVID, the stock market was making new highs. People misread it and considered it to be an opportunity to become rich overnight.
However, reality hit hard when most of those could not sustain in the highly volatile market, even for a few months. But their willingness to make money from the market didn’t die, and many people and fake advisors started reaping benefits out of it by offering services like trading account handling with profit sharing.
In this setup, someone (registered or unregistered) reaches out, offering to trade on your behalf using your demat account and split the profits.
But what most people don’t realize is:
- It’s completely illegal
- It violates SEBI guidelines
- And you bear the full risk of loss
Beginners with little or no understanding of the share market like this offer, and without any idea of risk, share their login with them. Unfortunately, they end up losing more money than they could afford or could have lost if they had traded by themselves.
It’s completely illegal
It violates SEBI guidelines
Trading Account Handling with Profit Sharing by Registered Advisory-Still Not Legal
As per SEBI guidelines, no registered Research Analyst (RA) or Investment Advisor can handle your account legally. However, there are some who do it by manipulating their client.
They generally come with an offer like:
“We place trades, you get 60% of the profit.“
Clients trusting their knowledge & experience, hands over their login without realizing that the losses are on their side only.
Now, such practices violate SEBI’s code of conduct and also lead to loss of clients’ capital by deploying it in high-risk strategies like naked options.
Trading Account Handling With Profit Sharing Telegram Channel
Apart from SEBI-registered advisory, some unregistered institutes & individuals approach traders on telegram & Instagram with an offer like
“DM us to handle your account. No fees. Just profit sharing 70:30.”
But here’s what happens:
- Fake screenshots are used to show profits
- You are asked to fund ₹1 lakh or more and share login credentials
- Losses occur due to high-risk F&O or scalping strategies
- Once losses happen, the handlers either disappear or block you
- Most operate without any SEBI registration and offer no accountability
Consequences of Trading Account Handling with Profit Sharing
Traders facing losses or lacking knowledge have no idea of the guidelines of SEBI and get trapped in the advisory or fake scammers’ trap of profit sharing on account handling in stock market.
This generally leads to much bigger consequences, such as:
- Account misuse: Handlers place trades beyond agreed risk
- Capital erosion: Retail investors often lose their entire trading capital
- Psychological stress: Traders face emotional distress and family issues due to financial losses
- Difficulty filing complaints: No understanding or challenges in reporting, if the handler is unregistered
How to Report Trading Account Handling with Profit Sharing
If you fell into this trap, you’re not alone. Take action immediately:
- If the handler is SEBI-registered, register with us and get assistance to lodge a complaint in SCORES.
- If they’re unregistered, you can still reach out to us.
We assist with:- Drafting the complaint professionally
- Filing it with the right regulatory body
- Preparing for arbitration if required
Recently, we helped and represented one of the victims in arbitration and helped him in getting 100% profit sharing scam recovery.
SEBI Registered Account Handling Services- What’s Legal
As per SEBI guidelines, there are services like account handling that are ethical as well as legal. As per the regulatory body:
- Only PMS or AIFs registered with SEBI can legally manage your funds under a formal structure
- RAs and IAs can give advice, but not execute trades or handle your account
- Even SEBI-registered entities are prohibited from offering guaranteed returns or entering profit-sharing agreements
Conclusion
“Profit sharing” may sound tempting, but if it’s done by an unregistered entity or without proper licensing, it’s not just risky, it’s illegal.
If you’ve already been a victim or are unsure about someone handling your account, reach out to us. Our team can help you recover, report, and most importantly, learn to protect your trading journey.
