Unauthenticated news guidelines

Rumours move markets. Employees of SEBI-registered intermediaries often hear them first. A client mentions one. An industry contact passes one on. An unverified message arrives on a phone.

SEBI's guidelines exist to stop that rumour from spreading further. They stop it moving through the intermediary's own staff and channels.

The four guidelines the workbook lists (Chapter 4, section 4.2.4):

• (a) Every registered market intermediary must have a proper internal code of conduct and controls. Employees, temporary staff and voluntary workers must not encourage or circulate rumours or unverified information from clients, industry contacts or any other source, without first verifying it.
• (b) Access to blogs, chat forums, messenger sites and similar platforms should be restricted, supervised, or not allowed at all.
• (c) Any usage logs of such platforms, however they are named, must be treated as records and kept in line with the regulations governing that intermediary.
• (d) Any market-related news an employee receives, whether on official mail, personal mail or a blog, must be forwarded only after the intermediary's Compliance Officer has seen and approved it. An employee who skips this step is treated as having violated SEBI's Act, Rules and Regulations and is liable for action — and the Compliance Officer is separately liable for a breach of duty for letting it through.

An employee at a mutual fund distributor hears, through an industry WhatsApp group, an unverified rumour that a large AMC is about to face a regulatory action. Excited to be first with the news, the employee forwards it directly to a group of clients.

This breaches 2 of the 4 guidelines SEBI has issued: guideline (a), because the employee circulated unverified information without checking it first, and guideline (d), because — even if verification had been possible — the news should have gone to the Compliance Officer for approval before being forwarded to anyone outside the firm.

If the rumour turns out to be false and clients make investment decisions based on it, both the employee and the firm's Compliance Officer face liability under the guidelines — the employee for circulating it, and the Compliance Officer for the breach of duty in not having stopped it, if the firm's controls should have caught it first.

Chapter 4 (Legal and Regulatory Framework), section 4.2.4 ("SEBI Guidelines for Circulation of Unauthenticated News"), lists all four guidelines together immediately before the chapter turns to investors' rights and obligations. Expect a question on who must approve market-related news before it is forwarded — the Compliance Officer, specifically.

• Both the employee and the Compliance Officer can be held liable — the guidelines do not stop at disciplining the person who circulated the rumour.
• Access to blogs and chat platforms must be restricted, supervised, or blocked outright — leaving it entirely unmonitored is not compliant.
• Usage logs count as records that must be retained under the intermediary's applicable regulations, not casually discarded.
• The rule applies to personal mail and personal devices too, wherever market-related news reaches an employee, not only official communication channels.