Sebi is regulating influencers. What if they’re also mutual fund distributors?
MUMBAI: In the rapidly growing world of finance influencers, what do Ananth Ladha*, Fincocktail, Pooja Patel, Himani Chaudhary, and Udayan Adhye share beyond their combined 12.5 million Instagram followers? These finance content creators are all registered mutual fund distributors (MFDs), leveraging their vast social media reach to redefine traditional financial advisory roles.
Mutual fund distributors, registered with the Association of Mutual Funds in India (Amfi), traditionally earned commissions through direct client interactions. However, influencers are now increasingly tapping into their extensive online followings to generate leads, merging finance with social media savvy. While some rely solely on mutual fund distribution, others diversify with paid partnerships and online courses.
Yet, this evolving landscape has caught the attention of the market regulator. Madhabi Puri Buch, chief of the Securities and Exchange Board of India (Sebi), signalled upcoming regulations to disentangle registered entities from unregistered influencers. At a recent board meeting, Buch emphasized that Sebi-registered entities must distance themselves from unregistered creators offering stock analysis or performance claims, with exceptions only for purely educational content.
Despite Buch’s directive, the treatment of Amfi-registered distributors remains ambiguous. Neither the consultation paper nor the Amfi code of conduct specifically addresses such influencers. This regulatory gap leaves room for potential missteps and confusion.
«Currently, Amfi lacks specific guidelines for financial influencers (finfluencers) in mutual fund distribution and asset management, but Sebi discussions at recent board meetings hint at upcoming
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