Mumbai: India's securities regulator acknowledged gaps in its rules governing financial educators and vowed to ban the use of current market data for investor education, marking a tightening of oversight just days after imposing one of its largest penalties on a financial influencer.

Securities and Exchange Board of India Chairman Tuhin Kanta Pandey said Monday the regulator will "bring consistency" to conflicting circulars on live data usage, restricting educators to historical information only. "Only past market data will be used for educational purposes; current data should not be used," Pandey told reporters at the National Stock Exchange in Mumbai.

The announcement came at the launch of Past Risk and Return Verification Agency (PaRRVA), a framework developed with NSE and CARE Ratings to independently verify performance claims by registered market intermediaries. Pandey described the initiative as a "pioneering mechanism" that positions India as the first country to establish independent validation of investment returns.

Conflicting Rules Create Confusion

Pandey acknowledged an "inconsistency" between two SEBI circulars that has created uncertainty for market educators. A circular issued in January 2025 prohibits educators from using market data from the preceding three months, requiring a minimum three-month lag to prevent disguised stock-tipping. However, the 2023 Investment Adviser Master Circular contains more permissive language, allowing educational entities to use live market feeds if they do not provide actionable advice.

The contradiction has left algorithm trainers, options educators and technical analysts uncertain about compliance when teaching with real-time charts.

Despite acknowledging the gap, Pandey rejected claims of a "regulatory vacuum," stating there is merely a "lack of understanding". "Our regulations clearly say that one cannot give stock tip advice," he said. He emphasised SEBI's focus remains on preventing mis-selling disguised as education: "Live data should be for education only, not for current market action".

Enforcement Following Major Penalty

The clarification follows SEBI's December 4 order against financial influencer Avdhoot Sathe, directing disgorgement of Rs 546 crore and barring him and his trading academy from securities markets. The regulator found the academy provided specific buy and sell recommendations, stop-loss levels and live trading calls without registration as an investment adviser.

Citing a recent survey, Pandey noted that 62 per cent of respondents make investment decisions based on finfluencer recommendations, while only about one-third said they possess adequate securities market knowledge. "There is a need for credible performance data to manage expectations and promote responsible investing," he said.