Control spread of false news, says Sebi


MUMBAI : The Securities and Exchange Board of India (Sebi) in its master circular on Tuesday has directed market intermediaries to put in place an internal code of conduct and controls to deal with the increase in circulation of unauthenticated news by Sebi-registered market intermediaries. This comes after the regulator said it has observed that a lot of unauthenticated news related to stocks was being circulated through blogs/chats, emails, forums by employees of broking houses and other intermediaries. This is being done without caution as mandated under the code of conduct for stock brokers and the respective regulations of various intermediaries registered with Sebi, the regulator said.

Access to such blogs, chat forums, and messenger should be restricted under supervision or should not be allowed, Sebi said. Market-related news that workers receive via email, blogs, personal or official mail, or in any other way should be instructed to not be forwarded until it has been reviewed and approved by the compliance officer of the intermediary.

“This initiative by Sebi dates back to March 2011 when the regulator first issued a circular acknowledging this issue and provided for action to be taken by market intermediaries to prevent circulation of unauthenticated news. It is imperative for market intermediaries to ensure that a comprehensive code of conduct is put in place to prevent spread of speculative and/or unauthenticated information,” said DSK Legal partner Gaurav Mistry.

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