The advisory comes following Sebi receiving complaints against persons who have been giving stock-specific advice to investors and receiving consideration for the same.
“Investors are therefore advised to take adequate care and carry out necessary due diligence before acting on the basis of such advice or communication,” Sebi said.
It has also come to the notice of Sebi that some persons are giving investment advice through the print media or by sending bulk SMS messages even without entering into any contract or arrangement or without any consideration, the capital market regulator further said.
The code of conduct provides that an intermediary can give investment advice through media for a particular share only if he discloses his own interests in the security. Sebi said any unauthorised advice “might be an attempt to influence market price and lure investors”.
Published 19 March 2011, 16:19 IST