SEBI To Vote On Regulating Finfluencers On June 27 Meet

SUMMARY

The regulations may come up for vote as the markets regulator is looking to curb the revenue model of unregistered finfluencers in the country

The proposed rules may include provisions that bar SEBI-regulated entities from dealing, in any manner, with such unregistered financial influencers

Within SEBI, the concerns are reportedly around the mass appeal wielded by these unregistered finfluencers, who could, in turn, influence investments

The Securities and Exchange Board of India (SEBI) will reportedly vote on the norms to crack the whip on unregistered finfluencers at its upcoming board meeting on June 27.

Sources told Zee Business that the regulations may come up for vote as the markets regulator is looking to curb the revenue model of unregistered finfluencers in the country.

As per the report, the proposed rules may include provisions that bar SEBI-regulated entities from dealing, in any manner, with such unregistered financial influencers. In addition, the upcoming norms may also mandate registered finfluencers to display their registration details clearly.

Within SEBI, the concerns were reportedly around the mass appeal wielded by these unregistered finfluencers, who could, in turn, influence investments. Additionally, the markets regulator believes a section of these unregistered financial influencers may not possess the required knowledge and understanding of the product or services they may be selling to their followers.

This comes a year after SEBI floated a consultation paper that defined “financial influencers” or “finfluencers” as persons who provide information and/or advice on various financial topics such as investing in securities, personal finance, banking products, insurance, real estate investment, etc. through social/digital media platforms/channels and can influence the financial decisions of their followers.

The paper had also directed intermediaries registered with SEBI to sever ties with any unregistered entities. Earlier this year, SEBI whole-time member Kamlesh Varshney said that the regulator was mulling bringing finfluencers under the regulatory net to monitor compliance with security laws.

Apart from regulatory intervention, SEBI has also cracked the whip on finfluencers in the recent past. Late last year, SEBI also took action against Hyderabad-based finfluencer Mohammad Nasiruddin Ansari and barred him from participating in securities markets while also mandating the disgorgement of INR 17.2 Cr.

In May 2023, SEBI also penalised PR Sundar for offering investment advisory services without SEBI registration since 2013. He was ordered to pay INR 46.8 Lakh to SEBI as a settlement and INR 6.07 Cr to clients and investors as disgorgement.

In addition, Capital Gain Research’s Ruchit Gupta was also ordered to return INR 79 Lakh in May to investors last year and was barred by the regulator from accessing the securities market for six months.