Sebi cracks whip on 'fin-fluencers', lays strict rules for use of market data in content
According to SEBI, content creators can only use stock prices with a three-month lag, in a move aimed at preventing their views from being interpreted as real-time trading dips under the garb of financial education.
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In a major crackdown on 'fin-fluencers'—or influencers dealing in finance-related content, capital market regulator Securities and Exchange Board of India (SEBI) has issued guidelines with strict rules on aspects such as the use of live market data in educational content. According to a SEBI circular issued late on Wednesday, content creators can only use stock prices with a three-month lag, in a move aimed at preventing their views from being interpreted as real-time trading dips under the garb of financial education.
“A person engaged solely in education shall mean that such person is not engaged in any of the two prohibited activities,” wrote SEBI. "Such (a) person should not be using the market price data of the preceding three months to speak/talk/display the name of any security including using any code name of the security in his/her talk/speech, video, ticker, screen share etc. indicating the future price, advice or recommendation related to security or securities," it added.
Here is a summary of key rules set to impact fin-fluencers:
- Market-related education providers will only be able to quote real market data with a gap of three months. What this means is that they will no longer be able to use live or recent market prices anymore. Rules may lead to many fin-fluencers losing their subscribers and followers as the absence of live or recent market content may impact the appeal of digital content.
- Registered entities will not be able to associate with fin-fluencers in violation of this code, according to the circular. This rule may also impact such content creators in a big way as advertising based on monetary or non-monetary compensation helps many influencers attract followers.
- What is worth understanding is that the new guidelines are aimed at preventing potential investors from interpreting market-related tutorials as investment tips without prohibiting investment education. The latest set of rules cement certain related restrictions announced in October.
- These regulations are expected to impact fin-fluenders running illegal advisory businesses without proper SEBI registration in place.
- Educators will not be able to give investment advice or make market performance-related claims without seeking prior approval from the SEBI.
- Any entities found violating these rules risk penalties, suspension, or cancellation of their Sebi licence, the circular stated.
With inputs from agencies
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