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Market Regulator SEBI To Keep Tab On Social Media Activities of Companies

Market regulator Sebi is likely to issue guidelines to companies on using social media to disseminate company information, according to a new report.

The securities and exchange board of India (SEBI), will follow to the lead of the Securities Exchange commission (SEC) of United States and also hire staff to troll the social web and make sure companies don’t selectively divulge market sensitive information on the web, reports The Economic Times.

For startups and small and medium businesses looking to raise capital from the small and medium business exchanges of BSE and NSE, this is an important development. Small companies like MobME that are planning to list on the National Stock Exchange’s Small and Medium Exchange, might want to watch what they are saying on social networks.Facebook SEBIListed businesses usually have to maintain a high degree of transparency and consistency in the way they communicate with the market.

Last week the US SEC allowed listed companies to use social media sites such as Facebook and Twitter to make announcements if they have informed investors about the sites they plan to use in advance. The SEC dealt with the issue after a post by Netflix CEO Reed Hastings on his personal Facebook account boosted the Netflix stock significantly. Hastings, who has over 200,000, followers on Facebook, had posted that Netflix had streamed more than one billion hours of video in the month of June. This led to the SEC investigation which okayed the use of social media last week.

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