Advice in publicly accessible media

A broker who recommends a trade on TV is not a neutral voice. The broker, or the firm behind them, might already hold a position in that very security.

Viewers deserve to know this before they act on the advice. So SEBI's rules require the broker to say so, up front, every single time.

This applies whenever a broker or its staff give investment advice through TV, print or any other publicly accessible media.

Clause 7(A) of the code of conduct in the SEBI (Stock Brokers) Regulations states that a stockbroker, or any of its employees, shall not, directly or indirectly, render investment advice about any security in publicly accessible media — whether real time or non-real-time — unless a disclosure of interest has been made while giving that advice. The disclosure must cover the broker's own interest, including the interest of dependent family members, and the interest of the employer, including their long or short position in the security being discussed.

Where it is an employee of the stock broker rendering the advice, that employee must disclose the interests of their own dependent family members and of the employer as well — the disclosure obligation is not limited to the broker's own personal holdings.

A dealer employed by a brokerage appears on a business news channel and recommends going long on a particular commodity futures contract. Before, or alongside, that recommendation, he must disclose whether he personally holds a position in that contract, whether his dependent spouse or children do, and whether his employer — the brokerage itself — holds a long or short position in it.

If the brokerage's proprietary desk is already long the same contract and stands to gain if viewers follow the advice, failing to disclose that position would breach clause 7(A) — regardless of whether the advice itself turns out to be sound, and regardless of whether the appearance was a scheduled interview or a passing live comment.

Chapter 10 (Code of Conduct and Investor Protection Measures), section 10.1, sets out clause 7(A) immediately after the general "Investment Advice" clause, as part of SEBI's Code of Conduct for Brokers under the SEBI (Stock Brokers) Regulations. Expect a question testing what must be disclosed (own, dependent family and employer interest, including long/short position) and that the rule applies to both real-time and non-real-time media.

• The rule covers real-time and non-real-time media equally — a pre-recorded segment or a written article is not exempt just because it is not live.
• Disclosure must cover dependent family members and the employer, not just the individual speaking. A candidate who assumes only personal holdings need disclosure misses half the rule.
• This is distinct from the general suitability-based "Investment Advice" clause (7), which concerns advice to an individual client based on their profile — clause 7(A) is specifically about advice broadcast to the public at large.