SEBI in favour of Ban on sending trading tips via WhatsApp,Twitter, Facebook

By | October 8, 2016
(Last Updated On: October 8, 2016)

Restriction on providing trading tips

As per the Consultation Paper Released by SEBI :-

Restriction on providing trading tips

4.5.1  It is observed that, many persons are engaged in providing/sending the trading tips/securities specific recommendations, etc., using various electronic modes such as bulk short message services (SMSs), e-mails, blogs, internet or through any other social networking media such as WhatsApp, ChatOn, WeChat, Twitter, Facebook, etc. The general public is getting attracted or lured by such trading tips, securities specific recommendations and their investment decisions are being influenced by such messages which solicit investments and/ or promise unrealistic returns in the securities market.

4.5.2 In order to curb such practice of providing trading tips/messages containing buy/sell/hold recommendations on securities, it is proposed that:

a) No person shall be allowed to provide trading tips, stock specific recommendations to the general public through short message services (SMSs), email, telephonic calls, etc. unless such persons obtain registration as an Investment Adviser or are specifically exempted from obtaining registration.

b) No person shall be allowed to provide trading tips, stock specific recommendations to the general public through any other social networking media such as WhatsApp, ChatOn, WeChat, Twitter, Facebook, etc. unless such persons obtain registration as an Investment Adviser or are specifically exempted from obtaining registration.

c) A provision or clause shall be added in the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 {PFUTP Regulations} to restrict such activities by making necessary amendments to PFTUP Regulations.

Download Complete Consultation paper Consultation Paper on Amendments/ Clarifications to the SEBI (Investment Advisers) Regulations, 2013

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