SEBI’s regulatory proposal targets ‘Finfluencers’ to safeguard investor interests

New Delhi: In recent years, a new breed of influencers, commonly known as ‘finfluencers,’ has emerged, commanding significant fees, some as high as Rs 7.5 lakh, for a single social media post. These financial influencers have been instrumental in altering how people access and understand financial information.

However, their rapid proliferation has raised concerns about the quality and authenticity of financial advice they provide. To address these issues, the Securities and Exchange Board of India (SEBI) has proposed a regulatory framework aimed at bringing finfluencers under its purview.

SEBI’s proposed measures not only aim to ensure that investors receive accurate and unbiased financial information but also seek to uphold authenticity and reduce the risk of fraudulent activities. Feroz Azeez, Deputy CEO of Anand Rathi Wealth, emphasized the significance of these regulatory steps in enhancing investor protection and promoting transparency.

Under the proposed framework, finfluencers would be required to register with SEBI and adhere to specific guidelines. Additionally, unregistered finfluencers could face restrictions on engaging in promotional activities with mutual funds and stockbrokers. While many finfluencers offer valuable insights into the financial world, concerns have been mounting regarding the potential risks posed by unregulated individuals who might provide biased or misleading advice.

The regulatory move to address the role of finfluencers in the financial sector signifies a crucial step towards safeguarding investor interests and bolstering transparency, as Azeez highlighted. Registered finfluencers will also be obligated to display their contact information and make appropriate disclosures and disclaimers on their posts. This regulatory framework aims to strike a balance between fostering innovation and maintaining the integrity of financial information accessible to the public.