SEBI becomes Authorised Agency Under IT Rules: Powers to Issue Takedown Orders to Protect Market Integrity [Read Notification]
The present amendment aligns with broader government efforts to streamline the use of powers under Section 79(3)(b) of the Information Technology Act, 2000.
The Central Government has formally designated the Securities and Exchange Board of India (SEBI) as an authorised agency under the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (IT Rules), granting the market regulator direct statutory power to issue takedown orders and information-requests to digital intermediaries.
The amendment, notified through a gazetted notification dated 8 December 2025 marks a major shift in enhancing SEBI’s ability to regulate online securities-related misconduct, misinformation and fraudulent activities linked to the securities market, across the digital ecosystem.
The notification is issued under clause (b) of sub-section (3) of Section 79 of the InformationTechnology Act, 2000 (IT Act) read with Rule 3(1)(d) of the IT Rules, 2021.
These provisions allow the Central Government to authorise specific regulators to issue binding directions to digital intermediaries. Once authorised, they can mandate platforms such as social media networks, trading apps, messaging services and video-sharing sites to swiftly remove or disable unlawful content and to also provide information needed for regulatory investigations.
Intermediaries that fail to comply with the directions issued by the Authorised Agencies may lose safe-harbour protection under Section 79 of the IT Act.
Why has this status been conferred on SEBI?
SEBI’s new digital enforcement mandate is explicitly tied to Section 11(1) of the SEBI Act, 1992, which entrusts the regulator with protecting investors and to ensure the development and regulation of the securities market, and to employ such measures as it deems fit.
These expanded powers now reinforce SEBI’s ability to act against unscrupulous online schemes, unregistered investment advisory operations, manipulative social-media campaigns, illegal derivative tips and other forms of misinformation that can distort market integrity.
Although SEBI traditionally wields wide-ranging powers, including the authority to investigate insider trading, regulate stock exchanges and intermediaries, issue directions to prevent market manipulation, suspend trading activities, and impose monetary penalties, its powers did not directly extend into the IT Act framework governing digital intermediaries so far.
The new amendment bridges this gap by giving SEBI the ability to call upon platforms to remove harmful content, obtain user-level information and ensure compliance with market-related regulations.
As financial markets are increasingly integrated with digital platforms, a large volume of illicit activity including stock manipulation, circulation of unpublished price-sensitive information, anonymous trading groups, and deceptive advertising occurs through encrypted messaging channels and social media.
SEBI may invoke its takedown and information-request powers in situations involving online market misconduct, use of anonymous Telegram or WhatsApp groups circulating illegal trading tips, fake social-media accounts promoting small-cap stocks to artificially inflate prices, unregistered influencers soliciting funds or offering investment advice without SEBI authorisation, spread of manipulated research reports or doctored financial statements or the dissemination of viral misinformation designed to trigger panic selling or create false market confidence.
The Ministry of Electronics and Information Technology on Intermediary Powers
The Ministry of Electronics and Information Technology had earlier this year, conducted an initiative to standardise notices issued to intermediaries under Section 79(3)(b), emphasising clarity, consistency and the importance of prudent exercise of statutory authority.
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During the workshop on “Management of Information on Intermediary Platforms,” MeitY Secretary S. Krishnan underscored that while Section 69A empowers the Government to block content for national security-related reasons, Section 79(3)(b) pertains to intermediary liability and must be used cautiously to ensure constitutional balance, judicial scrutiny, and administrative precision.
SEBI’s newly instated powers essentially expand the regulator’s ability to police digital misconduct proactively and safeguard investor interests in a rapidly evolving online environment and is expected to reshape the compliance expectations for digital platforms dealing with market-related content.
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