SEBI cracks down on unregistered finfluencers with new rules
What's the story
In a new advisory, the Securities and Exchange Board of India (SEBI) has restricted influencers from using live stock prices. The move is aimed at preventing investment advice disguised as investor education. The market regulator now mandates any unregistered investment advisors, commonly referred to as "finfluencers," will need use three-month-old prices for their discussions.
Banned actions
Prohibited activities under SEBI's new advisory
The advisory specifically prohibits two activities. First, providing advice or any recommendation on specific stocks without SEBI's permission. Second, making any claim about returns or performance expressly or by implication, also without SEBI's permission. These restrictions are part of SEBI's efforts to regulate the influence of social media personalities on investment decisions.
Partnership rules
SEBI's regulations on influencer partnerships
The new advisory also mentions that registered entities cannot pay influencers for any kind of 'association.' These rules have been in place since August 29, 2024. SEBI has clarified that it is the duty of those regulated by them, to ensure compliance with these rules.