Sebi strikes finfluencers: Can Sebi diktat protect investors from dubious investment advices on YouTube, Instagram, WhatsApp?
finfluencers by prohibiting any association, monetary or non-monetary, between Sebi-registered intermediaries/regulated entities and unregistered entities (including finfluencers). Now, these rules have come into force.
Here’s what the new rule states: ‘The persons regulated by the Board and agents of such persons shall not have any association, like any transaction involving money or money’s worth, referral of a client, interaction of information technology systems or any other association of similar nature or character, directly or indirectly, with any other person who, directly or indirectly, provides advice or recommendation or makes any implicit or explicit claim of return or performance, in respect of or related to security or securities, unless permitted by the Board to provide such advice/recommendation/claim.’
What does this mean in practice? It implies that anyone who gives investment advice or recommendations, even implicitly, cannot receive any money or have any association with stock brokers or trading platforms and other market participants or any Sebi-regulated entity. It precludes even incidental association with such people or entities.
Sebi has delivered on the original promise of striking at the revenue model of finfluencers. However, when one looks at the wide expanse of finfluencing, I can’t help but feel that this will not make a big impact on the actual exposure that the unsuspecting public has to dubious advice.
To understand this, open YouTube or Instagram and search for a simple term
