Do not trust claims: Sebi cautions against social media trading tips

Sebi on Monday cautioned investors against relying on live or real-time trading strategies offered on social media, warning that such sessions may involve unregistered investment advisers. The regulator urged investors to avoid such claims and deal only with Sebi-registered intermediaries

New Delhi: Markets regulator Sebi on Monday cautioned investors against taking investment decisions based on “live trading strategies” or “real-time strategies” offered on social media platforms, saying such sessions may involve unregistered investment advisory services. The regulator said it has come to its notice that certain individuals on social media platforms are offering real-time tips on taking positions in the stock market through live trading sessions.

“These persons portray themselves as experts in the securities market, provide detailed analysis of when to invest, when to exit, strategies to be followed and the positions to be taken on market indices,” Sebi said in a press release.

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The regulator said some of these individuals claim to trade in real time while showcasing the performance of their trades, market patterns based on live data and the targets they expect to be achieved.

Sebi also pointed out that such live trading sessions are being viewed by a substantial number of people, with live chats enabled alongside the sessions where unregistered advisory services are allegedly being exchanged.

As per Sebi’s circular issued in May, market price data can be shared for investor education and awareness activities only with a lag of 30 days and without offering any monetary incentive to participants.

“A person engaged solely in education should not be using market price data of the preceding thirty days of any security or indicate the future price or provide advice or recommendation related to security or securities,” Sebi said.

The regulator further clarified that live market data cannot be shared by any entity except for purposes related to the orderly functioning of the securities market or for fulfilling regulatory requirements. Against this backdrop, Sebi advised investors to exercise caution and not trust claims made by persons offering live or real-time trading strategies on social media.

“Investors are advised not to trust claims of such persons and not to take their investment decisions on such live trading sessions and to deal with only Sebi-registered intermediaries,” the regulator said. Sebi urged investors to remain vigilant while carrying out transactions in the securities market and avoid relying on unregistered persons or entities for investment advice.