Indian capital market Sebi will issue guidelines to companies on usage of social media for disseminating information to clients and shareholders, reports Economic Times.
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Sebi’s introduction of social media norms is followed by the lead of its American counterpart, the Securities Exchange Commission (SEC). Further, the Indian regulator will soon hire staff to sift through social media sites and blogs to unearth tips that could impact stock price before they have been disclosed through official channels.
JN Gupta, former executive director of Sebi said: "The norms on use of social media may put the onus on companies to keep a check on misuse of these channels, which is good."
Experts say a grey area for regulators could be the alleged use of Android Apps and BBM by traders to spread rumours and tips. During the crash in mid- and smallcap stocks that took place between February and March, 2013.
Security agencies have been in a lengthy dialogue with BlackBerry for access to its network, but that is in the context of terrorism. In the US, the over-arching rule on non-public information is Regulation FD (Fair Disclosure).
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