SEBI seeks more control over WhatsApp & Telegram

As part of its ongoing crackdown on unregulated financial advice circulating on social media, the Securities and Exchange Board of India (SEBI) has once again approached the government, seeking enhanced powers to regulate unauthorized financial advisors on digital platforms. SEBI is pushing for increased control over social media platforms such as WhatsApp and Telegram, alongside access to call records for investigating market violations. This marks the regulator’s second request for such authority, with a similar proposal made in 2022 still awaiting approval.

The renewed request follows SEBI’s intensified scrutiny of market misconduct and the spread of unverified financial advice on social media. Despite previous discussions, tech giants like Meta and WhatsApp have refused to grant SEBI access to group chats, citing legal constraints.

 

 

According to a Reuters report, in a letter sent on February 3, SEBI urged the government to grant it powers to “take down any messages, information, links, and groups on social media channels if the content violated securities regulations.” The regulator also sought authority to access call or message data records for better enforcement.

Currently, such powers are restricted to select law enforcement agencies, including the Income Tax Department, Directorate of Revenue Intelligence, and the Enforcement Directorate.

 

In a revised statement emailed to Reuters on Friday, Telegram said it is in regular touch with various departments of SEBI and processes all valid requests for content moderation, which are submitted with the requisite documentation. "Telegram is fully cooperating with the concerned authorities to process their requests around content moderation or blocking groups or channels, after performing the necessary legal checks, as per the guidelines of the IT Act 2000. However, Telegram cannot provide access to call data due to the structural design of its technical architecture."

The revised statement omitted a previous reference from Thursday’s statement, which had mentioned that “Telegram has not denied access to SEBI” without further clarification. WhatsApp groups and Telegram channels have become increasingly popular among market participants, where financial influencers share trading tips on specific stocks and securities in exchange for money.

Several ongoing investigations into market manipulation, including front running and insider trading, necessitate SEBI’s access to records from these social media groups, according to a government official familiar with the matter. While the government is reviewing SEBI’s latest request, a Reuters report, citing an official, noted that such powers are typically reserved for serious crimes. Any decision to grant SEBI these enforcement capabilities would require a broader policy review applicable to all regulators. 

 

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