The wake-up call sounded by M Damodaran, the outgoing chairman of Securities Exchange Board of India (SEBI), India’s stock market regulator, regarding the pressing need for better disclosure norms for “experts” and anchors who give “advice” on stocks in the media, couldn’t have come at a more relevant time. Even as Dalal Street has been swinging up and down in recent weeks, top government and SEBI officials say they are looking at how the “advice” problem is dealt with the world over, before working out a suitable mechanism for India.

Speaking to The Indian Express Editor-in-Chief Shekhar Gupta on NDTV’s Walk the Talk, Damodaran was strongly critical of the tokenism that passes as disclosure especially on TV channels. He even commented on what he called was the worrying new phenomenon of “anchor-investors,” TV anchors who are also investors.

While C B Bhave, who takes over as SEBI chairman on Monday told The Sunday Express today that he wouldn’t like to make any comment, “for now,” sources said officials are looking at the strategy adopted by developed market regulators like United Kingdom’s Financial Services Authority (FSA) as well as the Securities Exchange Commission (SEC) in the United States.

SEC has had an Investment Advisers Act since 1940 which may be worth examining in this context, officials said.

In both UK and the US, advisers are required to not only register with the regulator but also comply with elaborate rules that require them to not just disclose all potential conflicts of interest in operations to the regulator but also to their existing and potential investor clients in writing.

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