Leading bourse BSE has asked market participants to exercise "greater caution" against unsolicited SMSes providing stock trading tips as regulators step up the vigil to prevent investors from being duped.
There are increasing instances of bulk SMSes being sent to investors and the general public, inducing them to invest in or purchase the stocks of certain listed companies, indicating target prices and giving fraudulent and misleading or false information.
Under Sebi regulations, investment advice and stock tips can only be given by investment advisors and certain other entities that are duly registered with the regulator.
In a circular addressed to market participants, BSE has asked them "to exercise greater caution with respect to tips/ rumours circulated via various mediums while dealing in the securities listed on the exchange".
Trai and Sebi collaborated closely to review the existing regulatory framework and industry practices to help in reducing the vulnerability of the securities market to manipulation through misuse of mass communication devices like bulk SMSes.