SEBI asks for trading data as it probes WhatsApp messages: source
India’s market regulator Securities and Exchange Board of India (SEBI) has asked for trading data on companies mentioned in a Reuters story last week about prescient messages on company earnings in social media chatrooms, a person familiar with the matter told Reuters on Tuesday.
The Reuters investigation documented at least 12 cases of prescient messages about major Indian companies being posted in WhatsApp groups limited largely to traders and market insiders.
“The regulator has asked the exchange to track the trading data for the companies mentioned in the Reuters report before and after their results were made public,” said an official at one of the bourses, who asked not to be identified, as he is not authorised to publicly discuss the matter.
Earlier on Tuesday, Indian newspaper Economic Times, citing an unnamed official, reported that the regulator has asked the exchanges for this data.
SEBI, the National Stock Exchange and rival bourse BSE Ltd all did not respond to requests for comment.
Ajay Tyagi, chairman of SEBI, told Reuters last week that the regulator will investigate the matter.
The messages about the 12 companies with prescient information obtained by Reuters involved mostly what were characterised as being upcoming quarterly results, including specific metrics such as net profits, revenues and operating margins.
They also included messages about upcoming bonus share issues or revenue guidance.
Seven of the companies are part of the benchmark NSE index: Dr. Reddy‘s, the drug maker Cipla, Axis Bank, HDFC Bank, Tata Steel, IT services firm Wipro and Bajaj Finance.
The other five were Mahindra Holidays and Resorts, Crompton Greaves Consumer Electricals Ltd, IT services providers Mindtree Ltd and Mastek Ltd, and India Glycols, a petrochemicals company.
India beefed up insider trading rules in early 2015, and it expanded what material constitutes “unpublished price-sensitive information” to include “any information” that is not “generally available” and that could have a market impact.
