SEBI set to rein in finfluencers; new regulations coming soon

The Securities and Exchange Board of India (SEBI) will soon come out with regulations governing financial influencers (finfluencers). This was announced by SEBI Chairperson Madhabi Puri Buch during an event held at the National Stock Exchange (NSE) on Tuesday. 

To note, finfluencers are those who provide financial advice on social media platforms like Instagram and YouTube. SEBI has directed regulated entities and registered investment advisors to refrain from collaborating with finfluencers.

Addressing the gathering, Buch stated, "We have recently formulated regulations addressing finfluencers, which will be notified soon."

In June, SEBI had introduced new rules to counter misinformation spread by finfluencers, prohibiting regulated entities from associating with unregistered individuals. However, the regulator exempted finfluencers sharing educational content to inform investors.

On Tuesday, SEBI proposed stricter norms to protect small retail investors from high-risk derivative trading. The regulator released a consultation paper outlining proposed changes, including increasing the minimum contract size for futures and options (F&O) trading to Rs 20 lakh (from the current Rs 5-10 lakh). SEBI suggests a phased increase to Rs 15-20 lakh and eventually Rs 20-30 lakh.

SEBI Chairperson Buch emphasized the importance of considering diverse perspectives during the consultation process, stating, "We rely on data and logic... We must hear every point of view, as the market is complex, and our actions may have unintended consequences." The regulator aims to ensure that all perspectives are considered before making a balanced decision.

ANI