Policy for Prevention of Circulation of Unauthenticated News

1. Purpose & Background

The purpose of this policy is to protect investors and preserve market integrity by preventing the circulation of unauthenticated news, rumours or unverified information relating to securities by the Directors, officers, employees, temporary staff, voluntary workers and other associated persons of Choice Equity Broking Private Limited (“CEBPL”), or through CEBPL’s infrastructure, without adequate caution and verification.

Market news or rumours circulated through email, messaging applications, social media, blogs or chat forums, without adequate caution, can do considerable damage to the normal functioning and behaviour of the market and can distort the price discovery mechanism. Such conduct may also amount to fraudulent or manipulative activity under securities law.

SEBI registered market intermediaries are required to put in place a proper internal code of conduct to govern the conduct of their personnel. This policy is framed under the Code of Conduct for stock brokers in the SEBI (Stock Brokers) Regulations, 2026 (Chapter VIII) (notified on 7 January 2026, replacing the erstwhile SEBI (Stock Brokers) Regulations, 1992), read with the SEBI Master Circular on Surveillance of Securities Market (which consolidates the erstwhile SEBI Circular Cir/ISD/1/2011 dated March 23, 2011 on unauthenticated news, and its addendum Cir/ISD/2/2011 dated March 24, 2011), and is aligned with the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 and the SEBI (Prohibition of Insider Trading) Regulations, 2015.

In particular, the SEBI (Stock Brokers) Regulations, 2026 expressly require a stock broker not to spread rumours to distort market equilibrium or for personal gain (Regulation 36), and to maintain an institutional mechanism to prevent, detect and report fraud or market abuse (Regulation 21). This policy forms part of that institutional mechanism.

2. Definitions

Unauthenticated news: Any news, information, rumour or claim relating to a security, issuer or the market that has not been verified and approved through the process set out in this policy, or that does not originate from an authentic, attributable and verifiable source.
Rumour: Any unverified information or assertion, whether obtained from a client, the industry, a trade source or any other source, the accuracy of which has not been established.
Modes of communication: All channels through which information may be circulated, including official and personal email, SMS, WhatsApp, Telegram, Signal and other instant-messaging applications, blogs, chat forums, and social-media platforms such as X (Twitter), Instagram, YouTube, LinkedIn, Facebook, Reddit and similar.
Unregistered advisor: Any person who, without holding the requisite SEBI registration or authorisation, provides advice or recommendations on securities, or makes claims of return or performance in respect of securities.
Associated persons: Directors, officers, employees, temporary staff, voluntary workers, authorised persons and any other person acting for or on behalf of CEBPL.

3. Applicability & Scope

This policy applies to all associated persons of CEBPL and to all modes of communication, whether using CEBPL’s infrastructure or personal devices and accounts, where the communication relates to securities or the market and is made in the course of, or in connection with, their association with CEBPL.

4. Prohibited Conduct

4.1 Circulation of Unauthenticated News and Rumours

Associated persons are prohibited from:

Circulating unauthenticated news relating to any security through email, messaging applications, social media, blogs, chat forums or any other mode of communication;
Encouraging, originating or circulating rumours or unverified information obtained from a client, the industry, a trade source or any other source, without verification; and
Forwarding any market-related news received in their official or personal email, messaging application, blog or any other manner, except after the same has been seen and approved by the Compliance Officer.

4.2 Approval and Verification Requirement

Any information or market-related news received by an associated person, in an official or personal capacity, shall be forwarded or further circulated only after it has been seen and approved by the Compliance Officer. Where the source or accuracy of an item cannot be established, it shall not be circulated.

4.3 Conduct on Social Media and Messaging Platforms

In addition to the above, associated persons shall not, in connection with CEBPL:

Post, share or endorse securities-related tips, recommendations, or return / performance claims on any social-media or messaging platform without the prior approval of the Compliance Officer;
Use CEBPL’s name, brand or infrastructure to lend credibility to any unverified securities-related content; or
Operate, in CEBPL’s name, any social-media handle, group or channel that disseminates securities-related content, except handles officially authorised and supervised by CEBPL.

Notwithstanding the above, where securities-market related content is approved by the Compliance Officer and permitted to be published through CEBPL’s officially authorised and supervised social-media handles, CEBPL shall comply with SEBI’s applicable disclosure requirements, including displaying the registered name and relevant SEBI registration number on the handle’s home page/bio and at the beginning of each such content. Where CEBPL has multiple SEBI registrations, the home page/bio shall provide a weblink containing the respective registration details, while each content shall disclose only the relevant registration details.

CEBPL does not maintain a separate Social Media / Communication Policy; this section serves as the standing control governing social-media and messaging conduct in connection with CEBPL, read together with the Code of Conduct.

4.4 Association with Influencers / Content Creators

CEBPL may engage or associate with influencers / content creators (for example, for investor-education or marketing content) only with the prior approval of the relevant stock exchange. No such association is entered into without prior exchange approval.

CEBPL and its associated persons shall not, in connection with CEBPL, associate with — or lend CEBPL’s name, brand or infrastructure to — any person who provides advice or recommendations on securities without being registered with or authorised by SEBI, or who makes any claim of return or performance in respect of securities without SEBI’s approval. Genuine investor education that does not include investment advice, recommendations or performance claims remains permissible.

4.5 Relationship with Anti-Fraud and Insider-Trading Obligations

Circulation of unauthenticated news or rumours may, depending on the facts, also constitute a fraudulent or unfair trade practice under the SEBI (PFUTP) Regulations, 2003, or involve unpublished price-sensitive information governed by the SEBI (PIT) Regulations, 2015. Nothing in this policy dilutes the separate obligations of associated persons under those regulations and CEBPL’s related codes.

5. Access Controls & Record-Keeping

CEBPL does not currently impose technical access restrictions or controls on its official systems in respect of chat forums, messenger applications or social-media sites. Control over such channels is presently exercised through the conduct-based requirements of this policy — in particular the prohibitions in Sections 4.1 to 4.4 and the prior-approval requirement in Section 4.2 — rather than through system-level access restrictions. CEBPL may introduce system-level controls over these channels in future as part of its surveillance framework.

CEBPL maintains the following records:

The logs of any officially authorised market-communication channels, as records maintained by the Compliance Officer; and
Records of approvals granted under Section 4.2, retained for the period required under applicable law.

6. Roles & Responsibilities

Compliance Officer: Reviews and approves market-related news prior to circulation, maintains records and logs, oversees the conduct-based controls, investigates suspected violations and reports as required to the exchanges / SEBI.
Department heads / supervisors: Ensure their teams are aware of and comply with this policy, and escalate suspected violations promptly.
Associated persons: Comply with this policy, seek approval before circulating any market-related news, refrain from circulating rumours or unverified information, and avoid any prohibited association under Section 4.4.

7. Reporting of Violations

Any associated person who becomes aware of a circulation of unauthenticated news or a breach of this policy shall report it promptly to the Compliance Officer. Reports may be made through CEBPL’s established escalation / whistle-blower mechanism, and the identity of a person making a bona fide report shall be protected to the extent permitted under applicable policy and law.

8. Consequences of Non-Compliance

An associated person who fails to comply with this policy shall be deemed to have violated the relevant provisions of the SEBI Act and the rules and regulations framed thereunder and shall be liable to disciplinary action by CEBPL, in addition to any action that may be taken by SEBI or the exchanges. The Compliance Officer shall also be liable for breach of duty in relation to the discharge of the responsibilities prescribed under this Policy. Nothing in this clause limits CEBPL’s right to take appropriate action for any breach of duty or non-compliance.

9. Awareness, Training & Acknowledgement

CEBPL shall make associated persons aware of this policy and provide periodic training as appropriate. Associated persons may be required to acknowledge, at onboarding and periodically thereafter, that they have read and understood this policy.

10. Review & Amendment

This policy may be modified, amended or altered from time to time to remain in compliance with the relevant provisions and regulations. It shall be reviewed at least annually, and additionally whenever SEBI or the exchanges issue an updated regulation, circular or guidance affecting its subject matter. The Compliance Officer is responsible for keeping this policy current and for placing material changes before the Board for approval.