No more unwanted stock tips, TRAI tells telcos

Key Highlights

• Unscrupulous entities have been sending telecom subscribers SMSes on investment advice.
• TRAI has instructed operators to curb bulk and unsolicited messages.
• Only SEBI registered investors can send out investment related information.

Telecom Regulatory Authority of India (TRAI) on Thursday issued a directive to telecom service providers in order to curb bulk or spam messages on investment advice from ‘miscreant’ entities.

“TRAI today issued a direction to all service providers to take certain steps for controlling bulk messages relating to securities,” the regulatory body said in a release.

The direction, as per the report, calls for the service providers to include steps to tighten the verification process around identifying SEBI registered investment advisors and norms to curb 'promotional' messages.

"Some unscrupulous persons or entities, masquerading as SEBI registered investment adviser as sending bulk SMS relating to investment advice or tips to telecom users for financial gains by manipulating the security market. Also lack of reliable information on the identity of miscreants and the senders of such SMS creates insurmountable roadblocks for SEBI in taking necessary enforcement action against them," TRAI said.

Following steps were instructed by TRAI :

• SMSs relating to investment advice/stock tips only from SEBI registered investment advisers, stock brokers, sub brokers, portfolio managers and merchant bankers (as per list available on SEBI website) shall be sent or allowed to be sent through registered Telemarketer.
• Messages from SEBI registered investment advisers shall only be sent as transactional message either directly or through a registered Telemarketer. Such messages shall not be sent or allowed to be sent as promotional messages.
• Necessary arrangements shall be made to filter and block the SMSs sent by Telemarketers using bulk SMS channel (telecom resources taken for promotional messages) containing certain key words relating to securities, such as buy, sell, hold, accumulate, target followed by Scrip code/ Scrip name provided by any recognised stock exchange.
• SMSs relating to investment advice sent by subscribers not registered with TRAI as a Telemarketer shall also be filtered and blocked using these key words through the signature solution already implemented by service providers.
• Before sending any SMS relating to investment advice or tip, verify from the list of registered investment advisers at the SEBI website whether the person or entity on whose behalf the message is sent is a SEBI registered investment adviser, collect the requisite document and verify the identity of the sender. Such verification shall also be ensured to be done by registered Telemarketers and only after such verification any SMS relating to investment advice or tip shall be permitted to be sent.
• The documents relating to identity of the sender shall be kept for a period of one year and shall be made available, upon request to the Authority or its authorised agency.

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