Amid a large-scale usage of smartphone messaging services like BlackBerry Messenger (BBM) and WhatsApp by manipulators to spread sensitive information about their target stocks, market watchdog SEBI is mulling over steps it can take to check risks being posed by these new-age mobile applications.
To strengthen its probe and oversight on stock market transactions, SEBI has already got software tools in place along with IT experts to analyse discussions on social networking sites like Twitter and Facebook.
However, applications like WhatsApp and BBM are proving to be too tricky for SEBI, given the multi-level difficulties faced in tracking the source and spread of market-sensitive information through these mass-messaging platforms, a senior official said.
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While these applications use the Internet servers of smartphones, the transmission of messages through these platforms happen in a highly encoded manner and it is very difficult for a third party to decode them.
The official said that the market manipulators started using blogs and social media platforms like Facebook and Twitter in a big way a couple of years ago whenever they wanted to spread a word for influencing some stocks.
However, most of the information shared on blogs and social media platforms can be easily tracked, given the highly public nature of such platforms.
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After finding out that the source and spread of any sensitive information through social media platforms could be apprehended easily by the regulators, the manipulators are nowadays mostly using BBM and WhatsApp.
The free messaging services available on these platforms seem to have added to their attractiveness among the manipulators.
The official said that SEBI is as such finding it difficult to get details like Call Data Records from telecom companies and it would not be easy to get information on messages shared through mobile apps — a commonly used term for such applications.
SEBI’s investigations into a number of insider trading and market manipulation cases during the recent months have shown that apps like BBM and WhatsApp were used. However, any tangible solution for knowing the source of messages being spread through these platforms has proven elusive so far.
Last year, SEBI had hired specialist IT officers for keeping an eye on the discussions taking place at these platforms.
Experts say that social media platforms have become a very effective place to spread the information fast, but at the same time, they are also being used by various scrupulous elements, including those in the stock market.
There are numerous blogs as well where members discuss stock market trends and in many cases stock tips are also exchanged.
Leading social media platforms like Facebook and Twitter are also full of such discussions and it is feared that scrupulous elements could be using such forums for their market manipulation activities.