SEBI Takes Down Over 15,000 Finfluencer Content Sites in Three Months
In the past three months, the Securities and Exchange Board of India (SEBI) has removed more than 15,000 content sites run by unregulated financial influencers. This action is part of SEBI’s efforts to protect investors, according to Kamlesh Varshney, a whole-time member of SEBI.
These finfluencer content sites were taken down by tech platforms at SEBI’s request. This move aligns with SEBI’s decision in July to stop regulated entities from associating with finfluencers.
Varshney explained that SEBI is working to ensure that investor education and regulation go hand in hand. SEBI is aware of the activities of unregistered finfluencers in the market, who are misleading investors and causing them to lose money. “We’ve received many complaints from investors. We then work with tech platforms where unregistered people are giving advice,” he said. “Over 15,000 content sites have been taken down in the last three months after we referred them.”
Varshney also pointed out that SEBI has asked tech platforms to create systems to identify unregulated content, in addition to SEBI’s oversight.
Speaking at the Global Fintech Fest, Varshney mentioned that SEBI had received over 1,000 responses to its proposal to ease some of the strict rules on registered investment advisers (RIAs) and research analysts (RAs).
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SEBI's New Rules to Protect Investors and Ensure Fair Markets
The Securities and Exchange Board of India (SEBI) has introduced new rules to protect investors and maintain market fairness. These rules target financial influencers, often called “finfluencers,” who provide financial advice without being properly registered.
Tackling Unregulated Advice
SEBI’s decision comes from concerns about the risks posed by finfluencers offering financial advice without proper regulation. The new rules ensure that all financial advice is given within a controlled and regulated framework.
Banning Connections with Unregistered Finfluencers
SEBI has banned regulated entities, like brokers and their agents, from working with unregistered finfluencers. This means no financial transactions, client referrals, or any tech-based interactions can happen between these regulated entities and unregulated advisors. SEBI also requires that regulated companies make sure their partners do not offer financial advice or make claims about investment performance without proper authorization.
Who’s Exempt and the Role of Education
These new rules don’t apply to people or groups focused solely on educating investors, as long as they don’t give direct or indirect financial advice or make performance claims. Certain digital platforms that prevent their services from being misused for unregulated financial advice are also exempt.
Easier Delisting Process
SEBI has also made changes to how companies can delist from the stock market. They’ve introduced a new “Fixed Price” option, where the acquirer offers a fixed price at least 15% higher than the minimum price set by Delisting Regulations. This is an alternative to the current “Reverse Book Building” process and aims to make the delisting process smoother while still protecting investors.
SEBI’s Dedication to Fair Markets
These new rules show SEBI’s strong commitment to creating a transparent and investor-friendly market in India. By addressing the risks of unregulated financial advice and simplifying the delisting process, SEBI aims to build a more reliable and trustworthy investment environment for everyone.
Disclaimer: This blog is for educational purposes only. The mentioned securities are examples, not recommendations. The content is based on various internet sources and may change. Always consult an expert before making any investment decisions.
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