Does Saying It’s Not Investment Advice Save You From Responsibility?

Today, with the increasing interest in the stock market, this abbreviation, which has become a habit for almost everyone, stands for “It is not investment advice” means.

CMB In the posts of many people who do not have a (Capital Markets Board) license or who are not professionals in economic matters, for the purpose of “information” or “suggestion”, this magic phrase from responsibilities within the scope of capital markets legislation by using they thought they were saved We see.

“If a taxi driver, a barber, or someone you don’t know who plays okey at a coffeehouse is talking to you about the stock market or the economy, the problem is quite big!”

From famous stockbrokers Dundar Altay‘s statement about the risks in the stock market is quite remarkable. This saying emphasizes that investors should be careful at a time when the market has become popular among ordinary citizens and even started to take place in daily conversations.

Generally, when the stock market begins to be talked about by a very wide audience, it is believed that the market is overvalued and a bubble forming It may indicate that it has started. This increases risks for investors because the market is not widely understood and analyzed. just because of its popularity Investing may cause prices to drift away from their real values.

This quote from Altay; It reminds stock market investors that they should act based on their own research and analysis, not on the general popularity of the market. This, he says, requires caution and constant monitoring of market dynamics, especially in stocks that show rapid price increases.

The extraordinary growth rates of some stocks in 2020 constitute one of the concrete examples of this type of market behavior. This popularization of the stock market and its spread among the public has led to need to be careful It could be a sign of an era. For investors, this increases the need to carefully evaluate market dynamics and potential risks.

Some people think that this abbreviation “ytd” is a “legal notice” required by the CMB.

Merely providing information about any investment instrument does not constitute investment advice. However, information about capital market instruments, the partnerships and organizations that issue them, and market trends is not available. router written or verbal information of a nature, is considered outside this scope.

Nowadays, people say “it is not investment advice” even when sharing general information about a stock. they felt they had to We are in a period.

According to the legislation, there is no problem in informational situations where investment advice is not given. So in short; In expressions such as the general functioning of the market, the price performance of the stock, sectoral expectations and the compilation of publicly available data on the subjects There is no need to use it.

However, if we look at the form we often encounter in the virtual world, this situation is a bit contradictory.

So especially In Telegram groups Those who bid on a particular stock and say it will rise or fall by this much end up writing this acronym and saying this that they have freed themselves from responsibility they think.

However, this is not exactly the case; if there is a situation that constitutes investment advice regarding a stock, using this abbreviation is legally prohibited. It does not provide complete avoidance of responsibility.

In capital markets Determination of principles and rules for individuals and institutions that will make investment recommendations It is the responsibility of the Capital Markets Board. The presentation of investment recommendations on every platform, from print media to digital media, depends on the regulations established by the Capital Markets Board.

The main legal regulation that provides guidance in this field and regulates investment consultancy activities was published on December 6, 2012 with the number 6362. In the Official Gazette published and entered into force Capital Market Law‘Stop.

“It is not investment advice” or its abbreviation YTD The expression is used by individuals or institutions that provide financial advice to indicate that the information they provide is not within the scope of investment consultancy and does not contain recommendations specific to their personal financial situations. However, this warning is in accordance with the legal obligations and regulations determined by the Capital Markets Board (CMB). does not provide immunity from liability.

If we examine the Capital Markets Law No. 6362, the crimes of transaction-based market fraud and information-based market fraud are regulated under the heading of Market Fraud of the Law. The regulations in question are as follows:

• ARTICLE 107 – (1) Those who buy or sell, give orders, cancel orders, change orders or perform account movements in order to create a false or misleading impression regarding the prices, price changes, supply and demands of capital market instruments will be sentenced to imprisonment from three to five years and imprisonment from five thousand to ten thousand days. They are punished with a judicial fine of up to However, the amount of the judicial fine to be imposed for this crime cannot be less than the benefit obtained by committing the crime.
• (2) (Amended: 27/3/2015 – 6637/11 art.) Giving false, inaccurate or misleading information, creating rumors, giving news, making comments or preparing reports or disseminating them in order to influence the prices and values ​​of capital market instruments or the decisions of investors, and Those who benefit in this way are punished with imprisonment from three to five years and a judicial fine of up to five thousand days.
• (3) The person who committed the crime defined in the first paragraph, by showing remorse, shall transfer to the Treasury an amount of money twice the amount of the benefit he obtained or caused to be obtained, not less than five hundred thousand Turkish liras; a) If he pays before the investigation begins, he will not be penalized. b) If the person pays during the investigation phase, the penalty to be imposed will be reduced by half. c) If the payment is made during the prosecution phase until the verdict is given, the penalty to be imposed will be reduced by one third.

As a result, we can say that posts made “for the purpose of guiding” investors about capital markets constitute the crime of market fraud.

In this case, the people who shared the sharing It is important to determine the purpose. While making this determination, the phrase “YTD is not an investment recommendation” is important to the extent that it changes the direction of the purpose seen in the content of the post.

However, a YTD note at the end of a post that contains investment advice and has a strong purpose of influencing investors’ decisions will not, as a matter of fairness, indicate that this purpose of influencing does not actually exist. And in the Capital Markets Law Elements of Market Fraud Crime will occur.

Investment advice only Portfolio Management Companies and Licensed Investment Experts can provide it. This is done by giving a portfolio distribution according to your risk perception, not on a stock basis.

“Bull season is coming; throw 300-500, forget it.” Not by trusting those who say; Do it by educating yourself, learning for yourself with investment awareness and making a decision as a result. Listen to everyone if necessary, but you make the final decision, Don’t let anyone else decide for you. Because in the end, you will be the victim and you will have to pay for the damage.

Our other content about the stock market: