Exchanges ask brokers to be vigilant against SMS tipsters

To prevent investors from falling prey to scamsters promising huge stock market returns, leading stock exchanges BSE and NSE have asked their trading members to exercise caution with respect to tips circulated through popular social media platforms and mobile messaging services.
In separate notices today, the exchanges also asked the brokers to advise their clients not to blindly follow unfounded rumours and tips and invest in securities after conducting appropriate analysis of respective companies.
"Trading members are aware that the exchange has been taking various measures for the purposes of investor protection and maintaining market integrity," said the BSE.
"In this regard, it is once again reiterated that the trading members should exercise necessary caution with respect to tips/rumours circulated via various mediums like social networks, SMS, WhatsApp, blogs while dealing in the securities listed on the exchange on behalf of their clients," it added.

Advising its members to be vigilant, the National Stock Exchange (NSE) asked trading members and investors "to share their knowledge or evidence of systemic wrongdoing, potential frauds or unethical behaviour through the anonymous portal facility provided on the exchange website".
"Trading members are requested to advise their clients and remain cautious on the unsolicited emails and SMS advising investor to buy, sell or hold securities trade only on the basis of informed decision," it added.
Market regulator Sebi has busted various scams wherein 'trading tips' were being offered through mobile SMSes and WhatsApp messages by unregistered investment advisors while promising guaranteed returns.

In a large number of cases, those offering such 'SMS tips' services are not registered with the market authorities to carry out such operations and make wrong claims of being authorised entities and also use the names of stock exchanges, for their messages and websites.