SEBI Gets Power to Takedown Misleading Market Content Under IT Rules
New Authority to Protect Investors from False Online Information
Balancing Market Integrity with Digital Freedom
By Our Legal Reporter
New Delhi: December 11, 2025:
In a landmark move, the Central Government has empowered the Securities and Exchange Board of India (SEBI) to act as an authorised agency under the IT Rules, 2021. This decision allows SEBI to directly issue takedown orders to social media platforms, websites, and digital intermediaries when they host false, misleading, or unlawful market-related content.
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The move comes amid rising concerns about financial influencers (“finfluencers”), unverified stock tips, and fake investment advice circulating online, which have misled retail investors and threatened market integrity.
Background
- The IT Rules, 2021 empower authorised agencies to direct intermediaries to remove unlawful content under Section 79(3)(b) of the IT Act, 2000.
- Until now, SEBI relied on coordination with other government bodies to curb misinformation.
- With this amendment, SEBI can now act independently, strengthening its role as India’s capital market watchdog.
Why This Matters
- Investor Protection: Millions of retail investors rely on online platforms for financial advice. False information can lead to huge losses.
- Market Integrity: Unverified tips and pump-and-dump schemes distort fair trading.
- Regulatory Efficiency: SEBI can now act swiftly without waiting for other agencies.
SEBI’s New Powers
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- Direct Takedown Orders: SEBI can instruct platforms like YouTube, Instagram, and X (Twitter) to remove misleading financial content.
- Information Requests: SEBI can demand data from intermediaries to track suspicious accounts.
- Action Against Finfluencers: Influencers giving unverified stock tips may face penalties or bans.
- Coordination with IT Ministry: SEBI’s powers align with broader government efforts to regulate digital content.
Challenges Ahead
- Balancing Freedom of Speech: Critics warn that excessive takedowns may curb legitimate financial discussions.
- Defining “Misleading Content”: Clear guidelines are needed to avoid arbitrary enforcement.
- Global Platforms: Many finfluencers operate from abroad, making enforcement complex.
Global Context
- United States: The SEC monitors financial influencers and requires disclosures for paid promotions.
- European Union: Under the Digital Services Act, platforms must remove harmful financial misinformation.
- Singapore: Influencers must be licensed to provide investment advice.
India’s move aligns with these global practices, aiming to protect investors while ensuring accountability in digital finance.
Expert Opinions
- Market Analysts: Welcome SEBI’s new powers as necessary to curb rampant misinformation.
- Legal Experts: Stress the need for transparent guidelines to prevent misuse.
- Investor Groups: Call for awareness campaigns alongside enforcement to educate retail investors.
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Conclusion
The designation of SEBI as an authorised agency under the IT Rules marks a new era in financial regulation. By giving SEBI direct powers to issue takedown orders, the government has strengthened investor protection and market integrity.
However, the success of this move will depend on balanced enforcement, clear definitions, and collaboration with digital platforms. As India’s capital markets grow, ensuring trust and transparency in the digital space is more important than ever.
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