The Indian government is investigating two internet firms for allegedly facilitating illegal activity on the part of brokers who sold services through their platforms.
India’s top regulator said Thursday it was probing the two firms, one of which is based in New Delhi, and other brokers for allegedly breaching the country’s foreign exchange control rules.
Indian authorities have been probing online brokers who offered services to customers who had invested in stocks.
A probe was launched after it was revealed that the brokerage had agreed to buy shares of an Indian company at a discount that was in violation of the countrys foreign exchange controls.
A source familiar with the matter told Reuters news agency that the probe into the broker firms involved in the alleged illegal activity was ongoing and that they were not the subject of any court orders.
India is one of the top trading partners for global broker-deals that trade on exchange-traded funds (ETFs), which are similar to stock exchanges.
Brokers on India’s exchanges can sell securities to buyers using their own money or convert them into cash and sell the cash to customers.
They are required to register with the government to do so.Reuters