Madhabi Puri Buch, chairperson, SEBI, says that finfluencers inducing that trading can turn one into a crorepati or lakhpati will be treated as a fraudulent, misleading activity.
Market regulator Securities and Exchange Board of India (SEBI) will soon be tightening its noose around financial influencers (finfluencers) as cases of fraudulent market advices on social media grow.
Briefing media after a SEBI board meet, Madhabi Puri Buch, chairperson, SEBI, says that the board is in the process of finalising a draft discussion paper which will regulate finfluencers. With this paper, SEBI regulated entities (brokers, mutual funds, etc.) would be guided to not advertise with unregistered finfluencers.
Buch informs that this paper will be made public within two months. She further added that the board doesn’t have an issue with individuals educating investors or potential investors about the market and investments.
The board’s concern is over influencers offering unsolicited investment advice without being registered with SEBI. Cases of unregistered finfluencers offering investment advisors to the public are on the rise. The board recently penalised and barred finfluencer PR Sundar from trading for a year over alleged violation of investment advisers norms.
“Inducing that trading can turn one into a crorepati or lakhpati will be treated as a fraudulent, misleading activity,” she said at a media briefing
