The Securities and Exchange Board of India is following its preamble of protecting the interests of investors with renewed vigour.

Close on the heels of cautioning investors against entities sending bulk SMS without proper disclosures, the market regulator has issued a stern warning to intermediaries that circulate unauthenticated news through blogs, chat forums or emails.

This comes at a time when chat forums/groups have become the hotbed of market talk and anyone who is a member is allowed to contribute stock-specific buzz without proper due diligence.

Many of the established websites too, have sections on their portals wherein visitors can just login and upload any piece of information that can be accessed by all other members.

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Messages related to potential mergers, takeovers, dividend announcement, delisting, stock-split and private equity investment are quite common on such forums.

In a caution note issued on Wednesday, the regulator has directed all market intermediaries to put in place controls to monitor action of employees who circulate unauthenticated stock-specific news or rumours thereby causing damage to the normal functioning of the market.

"Sebi has observed that unauthenticated news related to various scrips are circulated in blogs,chat forums, e-mail, among others, by employees of broking houses/other intermediaries without adequate caution as mandated in the code of conduct for stock brokers," says the Sebi note.

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Sebi is of the view that 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.

In a move that could face stiff opposition from the broking community, it has said that access to blogs, chat forums, messenger sites, among others for employees should either be blocked or restricted under supervision.

Further, Sebi wants brokerage employees to forward market-related news only after approval from the compliance officer.

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"Employees should be directed that any market related news received by them either in their official mail/personal mail/blog or in any other manner, should be forwarded only after the same has been seen and approved by the intermediary's compliance officer," it says.

If an employee fails to do so, he along with the compliance officer will be liable for action. Sebi also wants intermediaries to maintain logs for any usage of such blogs, chat forums, messenger sites as specified by the respective regulations governing the concerned intermediary.