Sebi to message Trai on banning mass stock tips via cells
New Delhi : The capital market watchdog may soon approach the telecom regulator to curb unsolicited stock tips on mobile phones. The objective of the Securities Exchange Board of India (Sebi) is to protect investors from being misled by such information, which could be erroneous or a ploy to manipulate stock prices.
"Such messages can mislead small investors... we are contemplating some action," a senior Sebi official told ET, adding that the market regulator may take up the issue with the Telecom Regulatory Authority of India ( Trai )).
Sebi has already come down heavily on internet blogs, chat fora , emails and social networking sites that offer advice on stocks. The telecom watchdog, which is chalking out a policy on bulk messages, has proposed a system of identifying senders of unsolicited messages.
The guidelines are yet to get a nod from the government. Apart from bulk messages pushing products, some market intermediaries have been using this platform to promote stocks. The issue largely relates to unsolicited text messages (SMSes) sent to people who are not clients of an intermediary. In March, Sebi had alerted investors in this regard.
"Where the advice is rendered or sought to be rendered by any person, by means of advertisements through SMSes, or the electronic or print media, whether pursuant to or in the absence of any contract or arrangement, it might be an attempt to influence market price and lure investors.
Investors are therefore advised to take adequate care and carry out necessary due diligence before acting on the basis of such advice/communication," the Sebi communique had said. The Sebi code of conduct for all intermediaries, including portfolio managers, provides that an intermediary or any of its employees cannot, directly or indirectly, give investment advice about any security in the publicly accessible media, unless it has disclosed its long or short position in the said security.
The regulator had recently announced a new code of conduct for staff of broking houses and other market intermediaries to check propagation of unsubstantiated news, which could have implications for stock price movements. "The staff of broking houses and other intermediaries should be discouraged from circulating information obtained from clients or others without proper verification," a recent Sebi circular said.
The market regulator will also start a software-based monitoring of discussions on social networking platforms such as Facebook and Twitter.
- Economic Times