Sangeetha Prathap

The Central Government has now formally empowered the Securities and Exchange Board of India (SEBI) to issue directions to online intermediaries, including social media platforms and digital publishers, for the removal or disabling of online content under the Information Technology Act, 2000. The development follows a notification issued by the Ministry of Finance and published in the Official Gazette on December 8, 2025.

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Through this notification, the Government has designated SEBI as the agency authorised to act under Rule 3(1)(d) of the Information Technology (Guidelines for Intermediaries and Digital Media Ethics Code) Rules, 2021 and Section 79(3)(b) of the IT Act. As a consequence, SEBI can now issue binding takedown directions to intermediaries for online content that is unlawful, misleading, or harmful to investors and the securities market.

The notification makes it clear that SEBI's powers extend specifically to online content that contravenes Section 11(1) of the SEBI Act, which deals with the regulator’s mandate to protect investors, regulate the securities market, and promote its development. With this authorisation, SEBI can seek immediate removal of content that may manipulate the market, mislead investors, disseminate false information, or otherwise adversely affect market integrity.

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Prior to this development, SEBI did not have independent statutory authority under the IT Act to issue takedown notices directly to online platforms. While it could request removal of unlawful content through other governmental channels, the absence of direct powers often caused delays in addressing fast-spreading misinformation in the digital ecosystem. The new notification fills this gap by granting SEBI explicit enforcement authority similar to that enjoyed by other designated agencies.

The notification further stipulates that SEBI may exercise these powers to ensure compliance with its regulatory framework and to protect investors from fraudulent schemes, pump-and-dump operations, misrepresentations by financial influencers (“finfluencers”), unauthorised investment advice, and other online activities that may distort market functioning.

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The move is significant in light of the exponential rise of digital financial content and SEBI’s ongoing crackdown on unregistered investment advisors and misleading market promotions. The enhanced powers under the IT Act are expected to strengthen SEBI’s real-time enforcement capabilities, allowing the regulator to respond swiftly to online violations that could impact investor confidence or market stability. With this amendment, SEBI joins a select group of agencies authorised to issue takedown directions under the intermediary rules—marking a notable expansion of its regulatory toolkit and signalling the Government’s intent to tighten oversight of digital financial communication.