Bourse sleuths go undercover to track 'closed' groups

Surveillance departments seek to tap stock-related information in social media circles

In a move that might appear out of a cops-and-robbers film, India's stock exchanges are looking to use an 'informer' system to penetrate closed media groups. Much like Martin Scorsese's 2006 movie, The Departed, which had law enforcement officials going undercover to keep an eye on criminal activity, those involved in bourses' surveillance function will be on the prowl to tap stock-related information shared in closed social media groups.

A senior exchange official says: "If there are closed user groups, can we break into that… it's like the movies, where a police informer is inside... these are some of the efforts."

Messages exchanged in closed user groups on the social media can be viewed only to members. An entry into such groups can generally be made through reference from an existing member, while there also are some due-diligence norms to be followed for new entrants.

The groups made for sharing 'market buzz' or rumours are usually on platforms like WhatsApp, BlackBerry Messenger or Google chat, according to two people who are part of such groups.

"There is a moderator for every group. These groups normally begin with a few people and only close and trusted individuals are added. These may not be very easy to get into," says a member of such a group.

Another person, part of a closed group, informs an individual's membership also depends on how much he can contribute to the circle.

Most people do not share anything on Google groups, which are largely used for sharing company research reports. "There is a record of everything put on Google groups. So, market buzz is shared on WhatsApp, BBM or under 'off-the-record' feature in Google's chat function," adds the first person quoted earlier.

According to the exchange official, the surveillance department's efforts are part of a larger aim of keeping an eye on the social media to spot anomalies in stock market movements. "You put some symbols under watch and get inputs to see if prices move in line with the sentiment. If they do not, why is it that the social media sentiment is high but the price movement on bourses is not, or vice versa; is there something else happening? Who are the guys pulling down the prices despite good sentiment? These are the questions we will try to answer."

The board of International Organization of Securities Commissions (Iosco), a stock market regulators' grouping that controls 95 per cent of the world's securities markets, noted the importance of social media surveillance at a meeting in July last year. "Social media could serve as a vehicle to influence investor behaviour, gather market intelligence and identify market trends, furthering Iosco's efforts to be proactive and forward-looking," it said in a statement.

The Securities & Exchange Board of India is also reported to be working on separate social media norms for the capital market.
EAR TO THE GROUND

• Exchange authorities are looking to monitor closed social media groups
• Messages exchanged in these groups are viewable only to members
• Regulators suspect these groups are used for communicating sensitive information
• Plan is to use an 'informer' system to break into such groups
• Popular platforms for sharing of market buzz are WhatsApp and BlackBerry messengers, besides 'off-the-record' Google chats