On Wednesday, the Securities and Exchange Board of India (Sebi) told stock exchanges, clearing corporations, and other market bodies to cut off ties with unregistered financial influencers, also known as “finfluencers,” within three months.
This comes after Sebi’s June 27 decision to stop market entities from working with content creators who give financial advice or make claims about the performance of stocks or securities without being registered.
According to Sharan Hegde, co-founder of the 1% Club (a platform focused on financial awareness), many finfluencers had already stopped working with market entities after Sebi’s consultation paper. “This is just the final step to end it,” he said.
Impact on Finfluencers
Bigger finfluencers had already ended their partnerships with regulated market entities, so this new rule will mostly affect smaller influencers, Hegde added. Trading platforms that have existing agreements with finfluencers will also need to stop paying them commissions.
However, Sebi made exceptions for those focused on investor education, as long as they don’t give advice or make claims about stock performance. It also allowed associations through certain digital platforms that have safeguards to prevent any prohibited activities.
Sebi first mentioned regulating finfluencers in January 2023. In August, it defined finfluencers as people who share financial information—like stock tips and personal finance advice—on social media platforms such as Instagram, YouTube, and Facebook. Sebi also highlighted the challenge of ensuring that these influencers don’t spread misleading information while still promoting financial awareness.
Earlier this year, Sebi fined a financial influencer, Ravindra Bharti, over ₹12 crore for misleading investors.
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