RealTime IT News

ASIC Targets Investment Chat Rooms

[Sydney, AUSTRALIA] The Australian Securities and Investments Commission (ASIC) has proposed a number of regulations in an attempt to control online investment chat rooms.

The proposed policy framework is designed to protect investors using Internet Discussion Sites (IDS) by regulating Web-based bulletin boards where individuals post information about investment products and services.

In an Exposure Draft released today, ASIC maintained that a licence should not be needed to run a facility that only allows ordinary investors to swap information and chat, but that this would apply only if the site was "not likely to lead investors to mistake it for professional advice."

"ASIC is seeking to strike a balance between allowing people to communicate freely with each other, inform themselves about security and minimizing the risk that sites may be used to manipulate markets, trade on insider information or take advantage of less well-informed investors," said ASIC Commissioner Jillian Segal.

ASIC will also require IDS' to display prominent warnings before users can participate in the discussions, designed to make people understand the kind of information they are receiving on the site.

"The sorts of warnings we suggest include that the IDS itself does not endorse or vouch for the accuracy of the postings, a statement that the postings are general information and a declaration that people who post information will be individually responsible for their authenticity and accuracy," Ms Segal said.

ASIC is further encouraging these sites link to their watchdog page so users can verify the information they are provided with.