The move comes as a result of a growth in alleged market manipulation activities within social networking as well as blogs and forums. SEBI reckons social media is being used to discuss financial markets, with people giving each other hints and tips on buy or sell transactions.
SEBI worries that unscrupulous users could be using these to manipulate the market for financial gain. It claims it's planning to put in place tools that will "perform an array of sophisticated analysis for trading data, telephone records, financial records, social network analysis."
The tool will help SEBI in various investigations and its oversight on stock market transactions, an official told The Hindu.
It will also be integrated with the SEBI DWBIS (Data Warehousing and Business Intelligence System) system that is used by regulatory bodies in various probes. This is something SEBI has been working on for a while now. In the past it has warned investors against websites offering stock tips.
“Many of these websites offer investment advice not backed by any reasonable basis and prima facie appear to be misguiding,” SEBI said, adding that investors could expose themselves to undue risk in using unconfirmed information available on such websites and blogs.