Sebi moots stricter ID rules for online market content

Regulator flags rising fraud by impostors and unregistered advisers through misleading posts

- Apoorva Ajith

The Securities and Exchange Board of India (Sebi) has proposed making it mandatory for all regulated financial entities to display their names and registration numbers on the home page of their social media handles and in every social media post, in a move to curb misleading investment content online.

In a consultation paper released on Friday, the market regulator stated that there is a need to distinguish between content posted by entities regulated by the Sebi board, such as mutual funds, brokers, and distributors, and that posted by unregulated entities.

Though the proposed norms will help identify registered entities, it does not do much for the plethora of content by unregulated ones. "This move would curb misleading posts by fraudsters and imposters, but the onus of verification is left to the investor watching the content on social media," said Vishal Bedse, investment advisor at ICICI Investment Management Co.