What will it take for Sebi to rein in social media influencers? | Techy Kings


There is a big problem when it comes to the consumption of personal finance content on social media. A social media account with a large number of subscribers is quite easily influenced and followers continue to believe that these tips would work wonders. Certified Financial Planner and Content Strategist at Groww Aditi Khandelwal quoted, “There was once an occasion where I have seen influencers give wrong tips that clearly showed they have no knowledge on the subject.”

The root cause behind this, points out Arijit Sen, Sebi RIA, co-founder, Merrymind, is the existing regulatory framework where there is no obligation on content creators to disclose whether they actually have the skills to represent themselves as personal financial advisors. or not.

While monitoring social media will not be an easy task, the Securities and Exchange Board of India (Sebi) is trying to find a solution. On Thursday, Sebi said it is working on a set of guidelines for financial influencers on such platforms.

“It is a long awaited move in the interest of investors at large. The impractical and/or false claims made by content creators must be tracked and necessary action must be taken for the overall growth of the investment industry,” Sen said.

What action should Sebi take?

Sebi RIA Avinash Luthria spoke about the swift action required from the regulator, “For example, banning unregistered investment advisers and research analysts who charge fees from clients. And also amending the regulation to stop most stockbrokers from making reckless recommendations on futures and options and micro-cap stocks.”

Consequently, SEBI may effectively be forced to first try to persuade the Advertising Standards Council of India (ASCI) to be stricter with fine influencers, advertisers and traditional/social media platforms. Further, from ASCI’s list of non-compliant entities, SEBI can publish the subset that relates to securities, he said.

On March 10, Sebi cracked down on market operators for allegedly manipulating stocks through social media. It conducted searches at the premises of at least seven people and one company at several locations in Ahmedabad and Bhavnagar in Gujarat, Neemuch in Madhya Pradesh, New Delhi and Mumbai.

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