2024-09-03 00:28:37
New Delhi: SEBI has amended the rules to regulate unregistered ‘finfluencers’. This has been done in view of growing concerns about the potential risk associated with such individuals. Those who provide financial information on social media are called Finfluencers. The regulator has ‘curbed’ the relationship between its regulated entities and unregistered people in three separate notifications. SEBI’s Board of Directors approved a proposal in this regard last month.
According to the new rules, a person regulated by SEBI and the agent of such persons will not have contact with any other person who directly or indirectly gives advice or makes a clear claim of returns. According to SEBI, such a person is one who is not registered with the board or has not been allowed by the board to give such advice or recommendation. In this regard, market experts said that by requiring finfluencers to register with SEBI and follow the guidelines, the regulator is setting a standard for accountability and expertise in this field.
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Such fininfluencers can give misleading advice
The move will ensure that mutual fund companies, research analysts, registered investment advisors and stock brokers do not partner with finfluencers. The guidelines come amid growing concern over the potential risks associated with unregistered finfluencers who may offer biased or misleading advice. They usually operate on a commission-based model. Over the years, finfluencers have significantly influenced the financial decisions of their ‘followers’.
Registration of 46 brokers cancelled
SEBI has cancelled the registration of 46 brokers. These include 39 stock brokers and 7 commodity brokers. SEBI said that all of them have failed to fulfill the registration requirements. The major stock brokers include Reflection Investment, Vineet Securities, Quantum Global Securities, Wellindia Securities, Amber Solutions, Arcadia Shares and other brokers. Apart from this, the registration of 22 ‘depository’ participants has also been cancelled.