Sebi announces new norms for market

Sebi announces new norms for market

This comes in the wake of observations by Sebi that unauthenticated news related to various scrips are circulated in blogs, chat forums or e-mails by employees of broking houses and other intermediaries in violation of rules.

It further said that staff of broking houses and other intermediaries should be discouraged from circulating information obtained from clients or others without proper verification. “... in various instances, it has been observed that the intermediaries do not have proper internal controls and do not ensure that proper checks and balances are in place to govern the conduct of their employees,” Sebi said, adding that such speculative news and “rumours” can affect the functioning of the markets and distort prices of bourses.

The move follows growing concerns over some employees indulging into activities like fraud against the clients, front-running, circular trading and manipulating share prices through rumour mongering.

In the circular, the watchdog further said that access to blogs, chat forum and other sites should either be restricted under supervision or access should not be allowed.

“Logs for any usage of such blogs/chat forums/messenger sites shall be treated as records and the same should be maintained as specified by the respective regulations which govern the concerned intermediary,” it said, adding that any market related news should be forwarded only with approval of concerned personnel.

“If an employee fails to do so, he/she shall be deemed to have violated the various provisions contained in Sebi Act/Rules/Regulations etc. and shall be liable for actions,” it said.