India's SEBI Seeks Enhanced Powers to Curb Financial Misconduct on Social Media
New Delhi, India - India's Securities and Exchange Board of India (SEBI) is seeking expanded authority from the government to combat the proliferation of unauthorized financial advice on social media platforms like WhatsApp and Telegram.
According to a government source and a document reviewed by Reuters, SEBI requests:
* Removal of illicit financial content from social media platforms
* Access to call records for investigations into market violations
Background
This is the second time since 2022 that SEBI has made such a request. The regulator has stepped up efforts to crack down on market abuses and regulate financial advice circulating on social media.
Social media companies have resisted providing SEBI with access to call data records and group channels, despite a previous meeting between the parties.
SEBI's Justification
In a recent letter, SEBI argued that it lacks the ability to investigate market violations effectively because current laws do not recognize it as an "authorized agency." The regulator seeks powers to:
* Remove violating content from social media channels
* Access communication records on digital platforms
Current Situation
Law enforcement agencies like the Tax Department and Enforcement Directorate possess similar powers.
SEBI's inability to access such records hinders its investigations into serious market manipulations like front running and insider trading.
Government Consideration
The government is examining SEBI's request. However, such powers are typically granted only for grave offenses and would require a broader regulatory policy decision.
International Perspective
Developed countries in Europe and the U.S. do not grant direct power to regulatory bodies to remove social media posts. Instead, they penalize individuals engaged in illegal activities.