Financial influencers involved in investor education will be exempt, SEBI said (File)
Mumbai:
Brokers and mutual funds should stop using unregulated financial influencers for marketing and advertising campaigns, markets regulator SEBI said today.
The Securities and Exchange Board of India (SEBI) said financial influencers involved in investor education will be exempt from the new restrictions.
The decision was taken to address concerns related to “certain persons, including unregulated entities, inducing investors to trade securities based on inappropriate statements,” SEBI said in a press release issued after a board meeting.
The increased participation of retail investors in stock markets during the pandemic has led to a rise in so-called influencers pushing financial advice through social media platforms.
According to SEBI data, as of April 2024, India had 154 million merchant accounts, a more than four-fold increase from 36 million merchant accounts in April 2019.
It will be the responsibility of the regulated entity to ensure that persons with whom it is associated do not violate the rules of conduct laid down by SEBI, including avoiding the promise of assured returns.
SEBI’s board also approved changes to delisting rules that would make it easier for companies to exit stock exchanges.