SEBI Tightens Regulations on Finfluencers: New Guidelines for Educational Content and Stock Market Advice

News:

MAS Team | 01 February 2025

The Securities and Exchange Board of India (SEBI) has introduced stringent measures to regulate financial influencers through a new draft circular, marking a significant step in protecting investors from potentially misleading financial advice.

The regulatory body has implemented key restrictions on educational content creation, specifically mandating that those providing market education must use stock price data that is at least three months old. This measure aims to prevent finfluencers from disguising stock tips as educational content on social media platforms.

Under these new guidelines, individuals engaged solely in educational content are explicitly prohibited from making direct or indirect stock recommendations unless they are registered advisors. The regulations strictly forbid unregistered finfluencers from making any claims about returns or performance, whether expressed explicitly or implicitly.

SEBI has also established clear boundaries for regulated entities, including mutual fund houses, research analysts, registered investment advisors, and stock brokers, prohibiting them from partnering with unregistered finfluencers. This move builds upon previous regulations that prevented market infrastructure institutions from associating with unregistered stock advisors.

The regulator has demonstrated its commitment to enforcement by taking action against prominent finfluencers like 'Baap of Chart', Ravindra Balu Bharti, and PR Sundar for regulatory violations. Violations of these guidelines could result in severe consequences, including monetary penalties, registration suspension or cancellation, and potential debarment.

This regulatory framework responds to growing concerns about finfluencers who, often armed with incomplete knowledge and biased perspectives, have been influencing stock prices and potentially putting investors' funds at risk. SEBI's consistent intervention in this space underscores its dedication to maintaining market integrity and protecting investor interests.

These measures reflect SEBI's ongoing efforts to ensure that financial advice and market education come from qualified, registered sources, thereby safeguarding investors from potentially harmful or misleading information in the digital age.

Dear Investor,
In case of any grievance / complaint :

Please contact Compliance Officer Shraddha Mhatre at [email protected] and Phone No. - 91-22-35131664.
You may also approach CEO Debashis Basu at email- id [email protected] and Phone No. - 91-22-35131664.