SEBI - Press Release about Curbing misuse of bulk SMS in the Securities Market
- PRESS RELEASE ABOUT CURBING MISUSE OF BULK SMS
IN THE SECURITIES MARKET"
It had come to the notice of the Securities and Exchange Board of
India (SEBI) that there are increasing instances of bulk SMSs being sent to investors
and the general public inducing them to invest in or purchase the stocks of
certain listed companies, indicating target prices and giving fraudulent
misleading/false information. SEBI regulation requires that investment advice
and stock tips can only be given by Investment Advisors and certain other
entities that are duly registered with SEBI. However, the main challenge faced
by SEBI in this context, was the lack of reliable information on the identity
of senders of such SMSs which created road blocks for SEBI in taking necessary
enforcement action against them.
In view of the detrimental effect of fraudulent bulk SMSs on the
integrity of markets and confidence of investors, SEBI sought the attention of
Telecom Regulatory Authority of India (TRAI) which has been entrusted with
regulation of the telecommunication services so as to protect the interest of
the consumers of telecommunications service and the public at large. TRAI and
SEBI collaborated closely to review the existing regulatory framework and
industry practices to help in reducing the vulnerability of securities market
to manipulation through misuse of mass communication device like bulk SMS.
TRAI vide its notification no. F. No.311-3/2015-QoS dated August 10, 2017
(link: http://www.trai.gov.in/release-publication/directions) issued directions
to all Access Providers to follow certain operational guidelines for SMSs
relating to investment advice/stock tips using the bulk SMS channel. SEBI
believes that these directions will go a long way to curb the dissemination of
fraudulent and misleading information through the bulk SMS channel.