Winning Bizness Sports Desk

Mumbai. To provide accurate and unbiased information to investors, market regulator SEBI is preparing to curb financial 'influencers'. Financial influencers give advice to people about investments through digital media, channels etc. In fact, it was revealed that these financial influencers charge up to Rs 7.5 lakh for making a post on social media and influence the financial decisions of people with their opinion. However, now they will have to come under the regulatory ambit, because the Securities and Exchange Board of India (SEBI) is preparing to control their rapidly increasing number. Experts are of the view that the proposed rules should harness the power of digital media to increase the overall financial awareness of the population fairly and transparently without compromising the far-reaching social media penetration so far

Investors should get accurate & unbiased information

Anand Rathi Wealth Deputy Chief Executive Officer (CEO) Firoz Aziz said that SEBI's proposed move ensures that investors get accurate and unbiased information. This will also help in protecting them from fraud. Under the proposal, financial influencers will have to register themselves with SEBI, and follow specific guidelines. Apart from this, it is also proposed to ban their partnership with mutual funds and share brokers. Many influencers on social media provide good information, but there is a growing concern that unregulated influencers can exacerbate risks and provide biased or misleading advice.

Making money from referral fees

Notably, in addition, many of them make money from referral fees or profit sharing for promoting the product, channel, platform, or services or get compensation directly from social media and other platforms. To address the risk associated with influencers, Sebi floated a consultation paper late last month proposing to restrict the association of registered intermediaries or regulated entities with unregistered influencers. "Influencers have significantly impacted their followers' financial decisions in the last few years and thus Sebi's proposed regulatory framework can make them accountable and responsible for the advice they provide," said an expert.