No violation of the Right to Free Speech and Profession, Requirement of License by SEBI for Research Analysts to speak or write regarding listed stocks on social media is valid: Punjab and Haryana High Court

The Punjab and Haryana High Court recently held that the mandatory requirement by the Securities and Exchange Board of India (SEBI) for its Research Analysts to obtain a license for sharing stock-related recommendations with others and on social media is not violative of the Right to Free Speech and Profession. This was seen in the case of MANISH GOEL Vs. SECURITIES & EXCHANGE BOARD OF INDIA (CWP No.17547 of 2022) and the case was presided over by Honourable Mr. Justice M.S. Ramachandra Rao and Honourable Mr. Justice Harminder Singh Madaan.


The petitioner holding expertise in Equity Research and Market Assessment for over 14 years of experience has claimed that the Securities and Exchange Board of India (Research Analyst) Regulations, 2014 violates his right to freedom of speech and expression guaranteed under Article 19(1)(a) of the Constitution of India, the right to practice profession/business of his choice guaranteed under Article 19(1)(g) and 19(6) of the Constitution of India, and also right to liberty guaranteed under Article 21 of the Constitution of India due to the alleged unreasonable restrictions imposed by the said Regulations on the petitioner.

The restrictions of SEBI are regarding the mandatory requirement for the Research Analysts to take a Licence/Registration from the SEBI to speak or write regarding listed stocks, and for sharing stock-related recommendations with others and on social media.

The petitioner further contends that citizens have a right to receive information and ideas and this would amount to denial to the general public of its right to receive information and ideas. He reiterates that these restrictions are unreasonable and are not of interest to the general public and do not fall in the purview of Article 19(2) and Article 19(6) of the Indian Constitution.


The Court pointed out that SEBI was enacted to promote the interests of Investors and regulate the market fairly and reasonably. The Court informed that SEBI before finalizing these regulations issued a public notification inviting public comments on the same. It also revealed that these guidelines are in consonance with the regulations of International Organizations of Security Commissions (IOSCO), which laid that the entities that offer investors analytical or evaluative services should be subject to oversight and regulation appropriate to the impact their activities have on the market or the degree to which the regulatory system relies on them.

The Court considered the possibility that if these powers by SEBI are exercised arbitrarily, an individual court can approach the court through Article 226 but the mere possibility of misuse cannot be grounds for violation of fundamental Rights. Hence, the Court ruled that these restrictions by SEBI are not violative of the aforesaid Fundamental Rights.

The Court noted,

“The fact that the Astrologers or Management consultants are allowed to give consultancy, and are not regulated, does not mean that Research Analysts who provided investors with information on the basis of which investment decisions are made, should also be excluded from regulation. So the plea based on Article 14 of the Constitution of India in that regard cannot be countenanced. In this view of the matter, we do not find any merit in this Writ Petition. Accordingly, the same is dismissed.”

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