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Markets watchdog Securities and Exchange Board of India (SEBI) is issuing a discussion paper to create guidelines to control unsolicited financial and stock market advice from social media influencers and also from unregulated investment advisors.
Speaking at a meeting of the Association of Registered Investment Advisers in Mumbai, SEBI Whole Time member Ananth Narayan Gopalakrishnan said that some unscrupulous people are misusing their SEBI registration to further their business and as a regulator “we don’t want (that) to happen” .
“We are issuing a discussion document seeking input on how to take effective measures to control unsolicited financial and market advice from social media influencers and also from unregulated investment advisors.
“After input from market participants and other stakeholders, we will issue guidelines to contain them,” said Gopalakrishnan.
There is also the issue of unregistered investment advisors, who pose greater risks to gullible investors. More importantly, “we see examples of abuse of their Sebi registrations by even some registered advisors,” he said.
“We want self-regulatory agencies to evolve so that some agencies outside of Sebi can do the policing. We are concerned about unregistered investment advisors and social media reinforces that,” he noted.
SEBI’s proposal comes against the background of many social media influencers providing unlicensed advice on stock investing.
Earlier, SEBI seized some WhatsApp groups and Telegram channels, which were used to leak important market movement data.