The Securities and Exchange Board of India (SEBI), the country's securities regulator, has advised intermediaries, including brokers, to disallow or restrict their employees' access to blogs, chat forums and instant messaging.
SEBI is worried that "unauthenticated news" related to shares and securities are circulated without adequate caution in blogs, chat forums and by e-mail by employees of brokerage houses and other intermediaries.
In a circular on Wednesday, the SEBI said that intermediaries lack the proper internal controls, and do not ensure that proper checks and balances are in place to govern employee conduct. Employees of the intermediaries are sometimes not aware of the damage that can be caused by circulation of unauthenticated news or rumors, it added.
The proliferation of the Internet and social networking in India has presented a number of challenges to the regulator. Last year, it cautioned investors about the large number of websites that offer investment advice to investors.
SEBI issued a number of instructions to intermediaries on Wednesday, including requiring them to treat logs of any usage of chat forums, blogs and instant messaging as part of the records they are required to maintain under the rules.
Employees should be directed that any market-related news received from them either in their official or personal mail, blog, or in any other manner, should be forwarded only after the same has been seen and approved by the intermediary's compliance officer.
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