Preparations to tighten the noose around the necks of the financial influencers on social media, who advise people to invest in assets like mutual funds and shares, are underway. Market regulator SEBI is finding out ways through which these influencers can be brought under the ambit of law without affecting the freedom of expression, as falling prey to their advices, lakhs of people are losing savings kept for investments.
According to the law in place, financial advisors are required to get themselves registered as Investment Advisors or IAs, and for such people, following the rules of IA is compulsory. But in the last few years, there has erupted a tsunami of such financial influencers on social media, who do not have a SEBI registration, and their followers number in lakhs. This is the reason that as per the Advertising Standards Council of India (ASCI), 415 cases of influencer guideline-breach were reported in the financial year of 2021-22.
A SEBI official said, “It is not easy to monitor social media, and that is why we are trying to bring those who earn money by advising others on social media, under the ambit of law”.