India's market regulator has requested expanded authority from the government to take down unauthorised financial advice from social media platforms like WhatsApp and Telegram. Additionally, according to a government source and a document reviewed by Reuters, it seeks access to call records to investigate market violations.

This marks the second time since 2022 that the Securities and Exchange Board of India (SEBI) has requested these powers, but government approval is still pending.

The request comes as SEBI has ramped up its investigations into market violations and took stricter action against unregulated financial advice spreading on social media. Meanwhile, social media companies have yet to comply with the government's request for access to call data records, groups and channels despite previously meeting with the regulator.

In a letter sent last week, SEBI stated that platforms like WhatsApp, owned by Meta Platforms, have refused to grant the regulator access to social media group chats. The current information technology law does not recognise SEBI as an 'authorised agency.'

The regulatory authority requested the authority to "take down any messages, information, links and groups on social media channels if the content violated the securities regulations," the letter stated.

SEBI has also requested the authority to access call or message data records shared via digital or social media platforms.

Currently, these powers are granted to other law enforcement agencies, such as the Tax Department, the Department of Revenue Intelligence and the Enforcement Directorate, but not to regulatory bodies.

As stated in the letter dated February 3, "SEBI finds itself limited while investigating serious market violations due to the absence of power to access the equivalent of call data records.”

The letter and its details have not been previously disclosed. SEBI, the finance ministry, and Meta Platforms did not respond to emails requesting comments, while Telegram was not immediately available for a response.

According to a government official with direct knowledge, multiple ongoing investigations into market manipulations, including front-running and insider trading, require the regulator to access records from these social media groups. WhatsApp groups and Telegram channels have gained popularity among market participants, where financial influencers provide trading tips on specific stocks and securities in exchange for money.

In August 2022, SEBI Chairperson Madhabi Puri Buch made a similar request, urging the government to grant the regulator more authority to access digital communications exchanged among individuals suspected of offences like insider trading.

The government did not approve SEBI's request for these powers but organised a meeting involving various departments, including SEBI, along with representatives from Meta Platforms. During this meeting, companies were instructed to share all relevant information about ongoing investigations.

The government is currently reviewing SEBI's latest request. However, an official noted that such powers are usually reserved for addressing serious crimes. Granting them to SEBI would require a broader policy decision affecting all regulatory bodies.

In developed nations like those in Europe and the U.S., securities regulators do not have the authority to remove social media posts directly. However, they can take action against individuals involved in illegal activities, such as fraud and deceptive advertising.