SEBI Seeks Broader Access to Social Media Records for Investigations into Market Violations
India’s Securities and Exchange Board (SEBI) is seeking enhanced powers from the government to access social media platforms such as WhatsApp and Telegram in order to investigate market violations and remove unauthorized financial advice. This request, which aims to expand SEBI’s ability to access call and message data, marks the second time since 2022 that the regulator has sought such authority. However, approval from the government is still pending.
The move comes amid an intensified crackdown by SEBI on unregulated financial advice circulating on social media, particularly within WhatsApp groups and Telegram channels. These platforms have become increasingly popular among financial influencers who share stock tips and other trading advice in exchange for payment, often leading to market manipulations like insider trading and front-running. SEBI has faced challenges in investigating these activities due to its limited access to digital communication records, which are essential for tracing violations.
In a letter sent last week, SEBI outlined its concerns, explaining that companies like Meta Platforms, which owns WhatsApp, have denied access to their group chats. This is because current laws do not recognize SEBI as an authorized agency with the power to obtain such information. The regulator has asked for the ability to take down content from social media platforms that violates securities regulations and to access call data records for ongoing investigations.
While SEBI is seeking these powers, other law enforcement agencies, such as the Tax Department and the Enforcement Directorate, already possess similar authority. SEBI’s request is under review, and a decision is expected to require broader policy changes. The government has yet to grant SEBI this authority, following a similar request made in 2022. Social media companies, including Telegram, have stated that they are cooperating with SEBI in moderating content but cannot provide access to call data due to technical limitations.
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