Securities and Exchange Board of India (SEBI) Chief Madhabi Puri Buch has emphasized the importance of registration for financial influencers, also known as 'finfluencers,' who wish to engage in securities-related activities or collaborate with regulated entities. Speaking at the Global Fintech Festival, Buch made it clear that while individuals have the freedom of speech, those looking to participate in securities dealings or partnerships with regulated entities must register with SEBI.
This statement comes in the wake of SEBI's recent proposal to restrict interactions between regulated entities and unregistered finfluencers. The move reflects SEBI's concerns about the increasing instances of incorrect financial advice and, in some cases, fraudulent activities associated with finfluencers.
Registered entities are expected to maintain no direct or indirect connections, whether monetary or non-monetary, with finfluencers. This regulatory approach aims to ensure greater accountability and transparency in the financial sector and protect investors from potential misinformation or unethical practices by finfluencers.
SEBI's stance underscores the need for individuals and organizations involved in financial advising and influencing to adhere to regulatory standards and guidelines. While SEBI respects freedom of speech, it emphasizes that engaging in securities-related activities requires compliance with regulatory frameworks to maintain the integrity and reliability of the financial ecosystem.
As the fintech industry continues to evolve and expand, regulatory bodies like SEBI are adapting to address emerging challenges, including the role of finfluencers in disseminating financial information and advice. Registration and compliance with regulatory authorities can help establish a safer and more trustworthy environment for investors and consumers in the financial sector.
SEBI's efforts to regulate finfluencers align with broader global trends in financial regulation, emphasizing the importance of responsible and accountable practices in the digital age. Finfluencers, like other financial professionals, must navigate evolving regulatory landscapes to contribute positively to the financial well-being of individuals and businesses while maintaining ethical standards and consumer protection.
The message from SEBI is clear: those operating in the financial space, including finfluencers, should be prepared to meet regulatory requirements and ensure transparency and reliability in their interactions with investors and the public.
