Financial Influencers On Instagram, Youtube Will Be Monitored & Governed By Govt: Misuse Of ‘Influence’ Will Be Checked
Securities and Exchange Board of India or SEBI is compiling rules which would control the growing base of financial influencers who put out advice on social media.
There has been a string of Indian online influencers who dole out financial and investment advice despite not being qualified for it
The impact of such so-called influencers causes a negative effect, especially in the case of recent startup listings.
Misuse of influence
Furthermore, there have been instances of influencers paid by companies to jack up their stock prices through advice.
The appeal for such people is mainly through their ability to break down complex financial jargon into simple terms.
Registration is a requirement
However, SEBI mandated that financial advisors have to register themselves which lends credibility.
At present, there are about 1,300 registered investment advisors in India.
The rise of financial influencers has been a challenge for SEBI.
In FY22, there have been 415 instances of violations by influencers and celebrities in finance- and cryptocurrency-related content.
Issues faced by regulator
SEBI chief Madhabi Puri Buch said that it is a challenge to define a financial influencer.
Along with that, the absence of a financial contract and adequate disclaimers prevents the regulator from pursuing such individuals.
It’s already cracked down on cryptocurrency advertisements by celebrities.