SEBI warns investors against live trading tips on social media

MUMBAI: The market may be live, but SEBI wants investors to think twice before following the action. The Securities and Exchange Board of India (SEBI) has cautioned investors against relying on “live trading” or “real-time trading” strategies promoted on social media, warning that such sessions could involve unregistered investment advisory services.

The regulator said it has observed individuals using social media platforms to host live sessions in which they present themselves as securities market experts and offer guidance on when to enter or exit trades, strategies to follow and positions to take on market indices.

Some of these individuals also claim to trade in real time while displaying their trading performance, live market data, market patterns and expected targets during the sessions. The sessions can attract substantial audiences, with live chats running alongside them, SEBI said.

The regulator flagged that these chats could also become a channel through which unregistered investment advisory services are offered or exchanged, potentially exposing investors to advice from individuals who are not authorised to provide it.

The warning comes against the backdrop of SEBI’s May circular governing the sharing of market price data for investor education and awareness. Under that framework, market price data can be shared for educational purposes only with a 30-day lag, and participants cannot be offered any monetary incentive.

SEBI has also clarified that individuals engaged solely in investor education cannot use market price data from the preceding 30 days of a security to indicate its future price or provide investment advice or recommendations.

Live market data, meanwhile, cannot be shared by entities except for purposes linked to the orderly functioning of the securities market or to meet regulatory requirements.

The regulator has therefore urged investors to exercise caution around claims made during live or real-time trading sessions on social media and not treat on-screen performance or market commentary as a substitute for regulated investment advice.

SEBI advised investors to make decisions independently and deal only with SEBI-registered intermediaries, while remaining vigilant when carrying out securities market transactions.

In a market where a trading tip can travel across social media in seconds, SEBI’s message is straightforward: the faster the advice arrives, the more carefully investors should check who is giving it.