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Your Benefits: Along with the popularity of social media, the number of financial influencers is also increasing, who give investment advice even if they are not qualified. That’s why SEBI is working on bringing guidelines to curb such influencers. In the last few years, financial influencers or fininfluencers have attracted investors. They present themselves as financial gurus and give expert advice. But, very few investors know that they were being paid for giving such advice. Investors have to bear the loss due to wrong information.
It is the responsibility of the market regulator SEBI (Securities and Exchange Board of India) to stop the wrong things going on in the market. SEBI is now going to take strict action to stop the misleading information given by financial influencers. SEBI is working on guidelines to crack down on financial influencers.
What is the matter of financial influencers?
According to Business Today, financial influencers have more subscribers on YouTube than new broking firms. That’s why many people look to him for investment advice. Many new broking firms and platforms take the help of influencers to reach out to more people where those influencers say that they have used the product of a particular firm. From this those influencers earn money. This directly affects the investors.
Anmol Das, head of research at Teji Bandhi, says that if you look on the internet, many influencers make videos stating whether they will invest in IPOs or not. Its effect is sometimes harmful, especially after the listing of some recent startups, it has also become clear. Many influencers also give stock tips on Telegram groups. Sometimes companies compensate these influencers for providing advice on their stocks, so that they can manipulate the price. According to Moneycontrol’s report, in the year 2022, there were 415 cases of violations by influencers and celebrities regarding content related to finance and cryptocurrencies.
Are financial influencers doing the same thing all over the world?
Das says that it is not so at all. The question arises that how did the US stock market regulator control the social media influencers? The US stock market regulator SEC had already issued norms to protect investors from ambiguous advice and to maintain fair functioning of the securities market.
He said that some time ago celebrity Kim Kardashian published a post on her Instagram account about the EthereumMax website related to crypto asset security, from where you can buy EMAX tokens.
The SEC later accused Kim Kardashian of not disclosing that the post was a paid promotion. Kim Kardashian has admitted that she took $250,000 to endorse EMAX on Instagram. The case was later settled by paying a fine and interest of $1.26 million.
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How will SEBI’s new rule affect investors?
According to Das, SEBI has not yet informed about the rules. But once these rules are implemented, the so-called fininfluencers will have to work in a circle. Apart from this, disclaimers and SEBI registration can be made mandatory to protect investors and encourage good practices. The rise of financial influencers has been a point of dilemma for the market regulator SEBI. That’s why SEBI is constantly making efforts to secure the interests of the investors. Until the new guidelines are issued, investors should be cautious and not invest based on advice from fininfluencers.
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