The National Stock Exchange (NSE) of India has reiterated its advisory cautioning people from falling prey to unsolicited messages and videos on social media.
Incidentally, the NSE had earlier on October 21, 2022 issued a similar circular advising caution to investors to be aware of such unscrupulous methods by certain elements designed at robbing and/or cheating investors of their money.
The NSE announced in a press release on February 24, 2023 that exchanges have been receiving multiple references where messages and/or videos were being circulated with recommendations to deal in certain scrips.
“Such recommendations are being circulated to investors by unregistered or unauthorised entities inducing them to deal in these stocks. The circulation of such posts is not only detrimental to the interest of the investors, but also adversely affects the integrity of the security market,” the NSE said in the press statement.
NSE said that in this regard, discussions were held in the recent meeting of the Securities and Exchange Board of India (Sebi) with stock exchanges.
“Based on the unusual price, volume variation, trading concentration and/or other factors, such scrips may be shortlisted for surveillance action similar to GSM stage IV,” the release said.
NSE said in the release that the name of the scrip will be made available in “Investors Beware” page on its website.
“It may be noted that the shortlisting of securities in the above mechanism is purely on account of market surveillance, and it should not be construed as an adverse action against the concerned company. This surveillance action will be effective from February 27, 2023,” NSE said in the statement.
It added that trading members are also advised to monitor unusual trading pattern by any of their clients, and/or group of clients having significant selling, trading, dealing concentration in relation to circulation of such videos and/or messages.
“Trading members are also required to educate their clients, investors by way of social media, SKIS campaigns, mailers, etc. to be aware of unregistered Investment advisors offering assured returns and seeking trading credentials. Any non-compliance in the matter shall be viewed seriously and may attract further action which may inter alia include disciplinary action as deemed fit in terms of rules, bylaws and regulations of the Exchange provided the facts and circumstances so demand. The aforesaid measure is without prejudice to the rights of Sebi and exchanges to take any further actions, in any manner, as may be warranted,” the statement further said.