Sebi issues new rules for finfluencers, tightens norms for stock education

Market regulator Sebi has announced some revisions to the norms for financial influencers. In an official circular, it said that finfluencers will not be allowed to use live stock market data in educational content anymore. It clarified that people who provide stock-market education will need to do with stock prices with a three-month lag. That is, they cannot use live market prices anymore. The move will end the practice of various influencers who run unregistered investment advisories in the name of stock-market education.

“A person engaged solely in education shall mean that such person is not engaged in any of the two prohibited activities. Such person should not be using the market price data of the preceding three months to speak/talk/display the name of any security including using any code name of the security in his/her talk/speech, video, ticker, screen share etc. indicating the future price, advice or recommendation related to security or securities,” the circular read.

Moreover, the persons regulated by Sebi like stock exchanges, clearing corporations, and depositories, as well as their agents, must not have any direct or indirect links with individuals or entities that provide advice or recommendations on securities without the approval of the regulator and make claims of guaranteed returns or performance related to securities unless approved by it.

To help regulated entities and their agents understand these provisions better, Sebi provided clarification in the form of frequently asked questions. The move is aimed at protecting investors and regulating the securities market by ensuring compliance with these new rules.