Sebi's dilemma: There exists a fine line between finfluencing and free speech

livemint.com:

Economists are reputed not to have any skin in the investment game. They make projections and presentations and talk to investors who invest in their stories. The government promotes digitization, which involves commerce going online and eases activity as well as audit trails.

CEOs give investors ‘forward guidance’ every quarter that generally says things will get better; if they say anything else, their share price takes a hit. Financial analysts make a prognosis of how markets for stocks, currencies or bonds will behave. Advertisements talk of how healthy the personal-use product is that they want us to buy.

Nutritionists and health experts prescribe diets and warn of various diseases caused by indiscriminate eating. Then, there is a flood of opinion in the media on almost everything that seems dominated by the social variety. What is common to all of the above is that someone is trying to influence everyone who hears or reads what’s being said.

There has been no objection so far to any of these actions. But, of late, the Securities and Exchange Board of India (Sebi) has stepped in to protect small investors by proposing to bring a class of “unregistered financial influencers," now termed ‘finfluencers,’ under regulation. This move is welcome, as individual investors who are not market-savvy often depend on advice from ‘experts’ who speak on TV or express views in newspapers or on social media.

The crux of the issue is that they may all have vested interests in making money by enticing followers to take a particular action. In these uncertain times, when inflation is high and one is unsure if the economy is really booming, it is not easy to get better returns on savings. Bank deposits are a safe but unattractive