SEBI proposes to regulate ‘Finfluencers’
Proposed regime may have registration, advertising guidelines, etc
– Sharon Pinto & Avinash Shetty | (corplaw@vinodkothari.com)
Introduction
In the digital age that we live in, our decisions are influenced by the content we consume on social/digital media platforms. This may include financial decisions too. Recently, there has been a rising trend of persons or entities who post quick bite sized posts with content providing financial advice or even promoting financial products. While some of these persons may merely have the intent of educating the masses and making financial advice more accessible, some may be working at the instance of issuers of these products, SEBI registered intermediaries, etc., for gain or gratification. Thus, influencers, who put digital content on financial products, and are engaged by any “regulated entities” or securities intermediaries, are now intended to be brought under the regulatory ambit of SEBI.
SEBI vide Consultation Paper (‘CP’) dated August 25, 2023, has put forth its concerns w.r.t. the functioning of the said finfluencers and has also proposed to regulate these entities (Our snippet covering the proposals in the CP can be viewed here).
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