Sebi Cracks Down on Finfluencers Amid Speculative Market Concerns

SEBI has decided to regulate financial influencers or 'finfluencers' due to emerging concerns about their potential risks. Chairperson Madhabi Puri Buch highlighted macroeconomic issues related to speculative bets in futures and options. New regulations will restrict associations between SEBI-regulated entities and unregistered individuals, ensuring accountable financial advice.

In a significant move, the Securities and Exchange Board of India (SEBI) announced on Thursday its decision to regulate financial influencers, colloquially known as 'finfluencers', amidst rising concerns over potential market risks posed by their advice. This follows increasing scrutiny over speculative betting in the futures and options (F&O) market by retail investors.

SEBI Chairperson Madhabi Puri Buch emphasized the alarming macroeconomic implications of such speculative practices, noting that household savings are depleting as individuals borrow money to invest in high-risk segments. To mitigate these vulnerabilities, SEBI has established an expert working group aimed at addressing the issues.

To curtail unregulated influences, SEBI approved new norms that will bar its regulated entities from associating with unregistered individuals who entice investors with misleading claims. This regulation aims to create a more accountable financial advisory environment while protecting retail investors from biased advice. Additionally, SEBI's board has made strides towards easing business operations and ensuring equitable market dynamics, signaling further regulatory initiatives in the future.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)