India’s stock market watchdog, the Securities and Exchange Board of India (SEBI), is pushing for greater authority to crack down on unauthorised financial advice shared on social media platforms like WhatsApp and Telegram.
With the rise of social media-based stock tips and market predictions, SEBI believes it needs stronger powers to investigate financial misconduct and protect investors. SEBI’s request for more power According to a report by the news agency Reuters, SEBI has formally asked the government for the ability to access chat records, and call logs, and remove misleading financial advice from social media platforms. Currently, platforms like WhatsApp, owned by Meta, do not share private group chat details with SEBI due to existing IT laws. SEBI argues that this limitation makes it difficult to track individuals involved in market manipulation and insider trading. Previous attempts and challenges This is not the first time SEBI has made such a request. Back in 2022, SEBI Chairperson Madhabi Puri Buch sought similar powers, but the government did not approve them.
Instead, authorities arranged discussions between SEBI and Meta to explore alternative ways to obtain necessary data for investigations. Comparison with global practices Interestingly, developed nations like the U.S. and European countries do not allow their securities regulators to directly remove social media posts. However, they impose strict penalties on individuals who engage in fraudulent financial activities. SEBI’s request, if granted, would mark a significant shift in India’s regulatory landscape. Government’s consideration The government is currently reviewing SEBI’s appeal but is cautious about granting such powers. Typically, only enforcement agencies like the Tax Department and the Enforcement Directorate have access to such data. Expanding these privileges to a market regulator would require a major policy decision. Why this matters The rise of social media-based financial influencers has made it easier for unregulated advice to spread, sometimes misleading investors and affecting stock prices.
SEBI’s push for expanded powers highlights the growing challenge of monitoring digital platforms and ensuring market integrity. As discussions continue, the government’s final decision could have a significant impact on how financial information is shared and regulated in India’s evolving digital landscape.Original Article