The Advertising Standards Council of India (ASCI) has implemented new rules requiring financial advisors or “finfluencers” to enroll with the Securities and Exchange Board of India (Sebi) and openly declare their credentials within revised advertising directives. These directives pertain to all individuals identified as finfluencers within the banking, financial services, and insurance (BFSI) industry who dispense investment guidance.
Enhancing Transparency and Consumer Protection: ASCI’s Revised Advertising Guidelines
Moreover, financial experts with recognized certifications are obligated to openly communicate their certified expert status and qualifications. In the context of providing guidance on stocks and mutual funds, finfluencers must prominently present their Sebi registration number and qualifications in their advertisements and on social media platforms. In the event of offering other types of financial advice, they must possess suitable credentials, such as a license from the Insurance Regulatory and Development Authority of India (IRDAI), a chartered accountancy (CA) certification, or a company secretaryship. Adherence to these disclosure prerequisites is mandatory.
These rules are applicable whenever finfluencers share information, endorse products or services, or make claims about commercial goods and services. As stated in ASCI’s official declaration, influencers who provide advice or comment on subjects related to commercial goods and services, banking, financial services, insurance, health, and nutrition must possess the necessary qualifications and certifications to provide such information and guidance to consumers.
Ensuring Transparency and Accountability in Advertising: ASCI’s Response to Growing Concerns
The guidelines additionally specify that all advertisements shared by social media influencers must conspicuously feature a disclosure label signifying that they constitute advertisements. This adjustment is a response to heightened scrutiny of financial influencers due to unethical trading practices in the stock market.
These updated guidelines have been instituted in response to concerns about potential risks linked to deceptive advertising content in critical sectors like BFSI, health, and nutrition. Initially introduced in May 2021, the primary objective of these guidelines was to assist consumers in recognizing promotional content and making informed choices. ASCI has now revised them to augment transparency and safeguard investors on digital platforms.
Manisha Kapoor, CEO and Secretary General of ASCI, underscored that, unlike celebrities, consumers might not always possess awareness regarding the qualifications and expertise of influencers. These additional requirements are intended to uphold consumer protection.
