The Securities Exchange Board of India (SEBI) will now use instant messaging channels for sending its summons and orders to securities law offenders. As per the sources, the regulatory body of securities will send summons and orders through apps like WhatsApp, Telegram and Signal, in addition to regular methods of communication, including registered post, courier and electronic mail.
On the legality of serving notices and orders via instant messaging platforms, the Supreme Court in July 2020 agreed in principle to the lawfulness of such practices. A bench of Chief Justice S. A. Bobde, Justice R. S. Reddy and Justice A. S. Bopanna, with the suggestions of attorney general K K Venugopal and solicitor general Tushar Mehta, agreed that notices sent by email would constitute a valid delivery mechanism.
The change in the method of communication is the need of the hour during the lockdown times as timely delivery of notices and orders through the physical mode of communication is difficult.
As per the reports, the Supreme Court has initiated practice, followed by Delhi High Court, district court and other financial authorities. The courts use the features of instant messaging platforms like ‘blue-tick’ to know whether the recipient has seen the document. Serving documents by multiple means will ensure the issuance of timely processes, and it will prevent recipients from ignoring the notices.
As per sources, SEBI has utilised the Supreme Court’s judgement and recommended the Ministry of Finance to legislate it for SEBI orders and notices even in a situation of no lockdown.
The Indian securities market operates in a near-complete 100% Demat environment. The know-your-customer (KYC) information of clients, which includes their names and phone numbers, is stored safely with intermediaries. SEBI can access this information upon request and need.
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