SEBI Pushes for Wider Access to Social Media Records

India’s market regulator is seeking expanded authority from the government to take down unauthorized financial advice circulating on social media platforms like WhatsApp and Telegram. Additionally, it wants access to call records for investigating market violations, according to a government source and a document reviewed by Reuters.

This marks the second instance since 2022 that the Securities and Exchange Board of India (SEBI) has requested these powers, though government approval remains pending.

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SEBI Action on Unregulated Tips through Social Media

SEBI’s appeal aligns with its intensified efforts to curb market misconduct and combat unregulated financial tips spreading through social media. However, social media firms have yet to comply with government requests to share call data records, group chats, and channel information, despite prior discussions with the regulator.

In a recent letter sent last week, SEBI highlighted that platforms such as WhatsApp, owned by Meta Platforms, have refused to provide access to group chats, citing current IT laws that do not recognize SEBI as an ‘authorized agency.’

The regulator has requested the power to remove messages, links, and groups from social media if their content violates securities regulations. Furthermore, SEBI has sought permission to access call and message records from digital and social media platforms.

Currently, such investigative powers are granted to law enforcement agencies like the Tax Department, the Directorate of Revenue Intelligence, and the Enforcement Directorate, but not to regulatory bodies like SEBI.

"SEBI faces limitations in probing serious market violations due to its inability to access call data records," the letter, dated February 3, stated. The document and its details have not been previously disclosed.

When approached for comments, SEBI, the finance ministry, and Meta Platforms did not respond to emails. Telegram was also unavailable for immediate comment.

A government official with direct knowledge of the matter noted that ongoing investigations into market manipulations—such as front-running and insider trading—require access to social media group records.

Market participants have increasingly turned to WhatsApp groups and Telegram channels, where financial influencers provide stock trading tips in exchange for monetary compensation.

Previous Request

Back in August 2022, SEBI Chairperson Madhabi Puri Buch made a similar request, urging the government to grant access to digital exchanges of information among suspects involved in insider trading and other offenses.

While the government declined to approve those powers, it did convene a meeting between SEBI, other departments, and Meta Platforms, instructing the company to share relevant data related to ongoing investigations.

The latest request is currently under government review. However, the official noted that such investigative powers are typically reserved for severe crimes, and granting them to SEBI would require broader regulatory policy changes.

Unlike India, developed markets such as the U.S. and European countries do not allow securities regulators to directly remove social media content. Instead, they focus on penalizing individuals involved in fraudulent or misleading activities.