SEBI has recently released a critical consultation paper focusing on the growing influence of ‘finfluencers’ in our financial landscape. This document emphasizes the need for a framework surrounding SEBI-registered intermediaries’ association with unregistered financial influencers.
Key Points from the Consultation Paper:
Objective: SEBI aims to gather public opinion on the proposal restricting SEBI-registered intermediaries from associating with unregistered ‘finfluencers.’
Background: With the growing popularity of finfluencers, there’s been heightened public and media scrutiny. Some provide genuine financial insights, but many operate as unauthorized Investment Advisers or Research Analysts.
Finfluencers and Their Model: Finfluencers, according to the Advertising Standards Council of India, have the power to impact their audience’s financial decisions. They often leverage platforms like Instagram, LinkedIn, and YouTube but might lack the necessary qualifications and not adhere to a financial sector’s code of conduct. Their revenue models can include referral fees, non-cash benefits, compensation from platforms, or profit-sharing agreements.
Limiting Association with Unregistered Entities: SEBI proposes measures to limit the connection between its registered entities and unregistered finfluencers. Key recommendations include prohibiting any form of association, ensuring the confidentiality of client data, and making mandatory disclosures by registered finfluencers. SEBI also emphasizes that registered entities disassociate from unregistered entities misusing their brand.
We wholeheartedly believe in transparency, integrity, and the protection of our customers. Thus, we encourage our community to familiarize themselves with this consultation paper. Your feedback can shape the future landscape of financial influencers in India.
If you have suggestions or feedback on this matter, please forward them to consultationMIRSD@sebi.gov.in by September 15, 2023. Ensure your email subject reads: "Comments on Consultation paper on Association of SEBI Registered Intermediaries/Regulated Entities with Unregistered Entities (including Finfluencers).”
Click here: LinkedIn to access the consultation paper.
