SEBI Chief Urges Finfluencers To Register If They Wish To Work With Regulated Entities

SEBI chief Madhabi Puri Buch has urged finfluencers looking to deal with securities or partner with regulated entities must register with the Securities and Exchange Board of India (SEBI).

“We are very clear. If you wish to stay outside the purview of SEBI, we don’t have any problem because we respect your freedom of speech. But if you wish to deal with securities, or wish to partner with regulated entities, then you need to come and register with us,” Buch said at the Global Fintech Festival.

Buch’s comments come just days after SEBI floated a consultation paper on August 25, which introduced a proposal to limit interactions between regulated entities and unregistered finfluencers. The market regulator has invited public comments on the proposals which can be submitted by September 15.

Buch emphasised that while SEBI respects freedom of speech, registration is necessary for those wanting to deal with securities or partner with regulated firms. “If your actions cross into enticement, entrapment, or fraud, that’s unacceptable,” she added.

Financial influencers or ‘finfluencers’ have come on SEBI’s radar amid growing cases of misinformation, and in many cases, outright fraud. The registered entities are expected to not have any direct or indirect association, whether monetary or non-monetary, with finfluencers, while such influencers are required to register with the regulator.

According to the market regulator, ‘finfluencers’ are persons who provide information and/or advice on various financial topics such as investing in securities, personal finance, banking products, insurance, and real estate investment, among other channels, through social or digital media platforms and can influence the financial decisions of their followers.

Buch further said at the fintech event that the markets regulator would like to see fintechs further democratising the market. 

“If what you do will democratise the market further, then we have all the time in the world for you, because that is our objective. We would like to see fintechs take the markets to more and more people across the country and do it at a low cost, which makes it inclusive,” added Buch.