Securities & Exchange Board of India (SEBI) has mandated the registration of Finance Influencers before they can offer advisory services. It has directed all the Brokers and Mutual Funds Companies to stop using Unregulated Influencers for their marketing & Advertising campaigns.
In recent times, the popularity of Financial Influencers have risen. They advise on Investments and Stocks through Social Media channels like YouTube, X and Meta. SEBI Chairperson, Madhabi Puri, announced on Thursday that Finance Influencers can only advise on investments after registering with SEBI.
Law Enforcement
As per new rules, its is illegal for unregistered financial Influencers to issue investment advise explicitly or covertly. The law shall penalize such people. However, SEBI has clarified that this is not applicable on those influencers who are just educating the investor.
This guideline was released from SEBI after it received many complains from investors that they had been misled.
SEBI barred Nasiruddin Ansari and two other associated entities from the market last week. The authorities found them guilty of misleading their 500,000 followers on YouTube. SEBI ordered to return the amount of Rupees 17.2 crore ($2.1 million) to the followers. Ansari’s web portal provided investment advice under the disguise of offering educational training, SEBI said.
The Investment Dilemma
Just open any Business News Channel, the anchor and Influencer would always say that Market is Up or Down or Stable and that this is the best time to invest. Have you ever heard someone saying not to invest? Do Finance Influencers take money from Brokers to Upsell or Down sell stock prices?
