The Securities and Exchange Board of India (Sebi) invited representatives of the print and electronic media to a pow-wow last week on journalistic ethics in the financial media. Is there honesty, transparency, reliability and accountability in the reporting and analysis of news from the financial markets and the corporate sector? Does the media have a code of conduct? Should one be imposed or voluntarily adopted? These and many other questions came up for a frank discussion. To initiate a debate on the issues Sebi has raised we publish below the letter communicated by Sebi and tomorrow a first response from Ms Sucheta Dalal, Consulting Editor, The Financial Express.For our part, we believe that all media must have a voluntarily adopted code of ethics and good conduct. We reaffirm our commitment to the highest principles of good journalism and assure our readers that we shall strive to be fully transparent and professional in our functioning.
We invite our readers to participate in this debate and let us know how best we can serve them.
The EditorMedia plays a key role in dissemination of information. News, views, comments and information play a very important role in the processing of investment decisions by investors. The content of the news and the manner in which it is presented becomes all the more crucial looking to the level of investor awareness in this country. Therefore, it is important that the information dissemination by media is as close as possible to the facts and comes from genuine, verifiable and responsible sources. We understand, to ensure this some countries have certain practices, rules or codes regarding disclosures, disclaimers and transparency etc., so that the investors while taking advantage of such information coming though media are well informed of the background.
At times some company related interests may plant stories or leak certain information in a manner which suits them. This makes the role of media more difficult as well as challenging. In this context, some of the issues which have come into focus from time to time are: l On several occasions it has been found that news items which were main stories/very prominently covered were not found to be correct on verification with the companies. Exchanges have reported several such instances. In many of the cases there was a sharp movement in the price of the scrip apparently because of such news items. At times, there are discernable patterns in timing of unverified news reports with the trading behaviour of scrips. It needs to be discussed whether company related news should be covered without verifying the same with responsible sources in the company.
Some of the newspaper employees/columnists/newspaper analysts may have interest in the securities of the company. It needs to be discussed whether they should write on the concerned companies in such a situation and, when they do, whether they should disclose their interest. It also needs to be examined whether such disclosures will be to the editor or to the public. Similar issues arise in the cases of TV channel anchors and commentators.Some of the reports in the newspapers and other media are in the nature of financial analysis. It needs to be decided as to what exactly constitutes financial analysis in the context of media and what should be norms for the same, if any, as there are issues in the context of possibilities of Insider Trading.Many a times certain matters are reported as grapevine or heard on the street. What kind of precautions need to be taken to ensure that investors don't get carried away with the same.Some TV Channels call market participants who have interest in the market to give day to day advice and name their "picks of the day" etc. What kind of safe guards need to be taken for such coverages. Whether personal preferences/comments etc. should be allowed to be aired on mass media during market hours.Some supplements of newspapers get printed a couple of days before they are brought out and distributed. Similarly, TV programmes get recorded much before they are telecast. It needs to be discussed whether the confidentiality of the content before the same is made public is not an area of concern.
In the context of Internet web-sites facilitating investment related chats and message/bulletin boards, what kind of disclaimers/disclosures etc. are required so as to ensure that investors take the same the way as these should be taken.(Tomorrow: Consulting Editor Sucheta Dalal's response to Sebi's note to the media)
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