Sebi mandates market entities to dissociate from 'Finfluencers' in 3 months

New Delhi: The Securities and Exchange Board of India (SEBI) has issued a directive requiring all regulated market entities to sever ties with financial influencers, popularly known as 'finfluencers', within the next three months. 

This directive follows SEBI's ongoing efforts to regulate the influence of unregistered entities on the financial markets and protect investors from potentially misleading advice.

SEBI's decision comes after a comprehensive review of the interactions between regulated entities like mutual funds, investment advisers, and stock brokers with individuals who provide financial advice or market tips on social media platforms without the requisite registration or oversight. 

This follows earlier actions where over 15,000 content pieces from unregulated finfluencers were removed from various platforms.

This regulation strictly prohibits any form of association, including but not limited to, financial transactions, client referrals, or system integrations with finfluencers who do not hold a registration with SEBI, stock exchanges, or other recognised financial bodies. SEBI has also mandated that registered entities must ensure their associates do not engage in any prohibited activities, aiming to curb indirect associations.

SEBI has indicated that it will monitor compliance with this directive closely and might introduce further guidelines or relaxations based on the feedback from market participants and developments in the finfluencer space.