SEBI cracks down on financial influencers: Shuts-down LIVE trading and more

The Securities and Exchange Board of India (SEBI) has taken a significant step to regulate financial influencers, often referred to as "finfluencers," by banning the use of live stock market data for educational purposes. This move is aimed at curbing the dissemination of real-time trading advice disguised as education.

In a recent circular, SEBI stated that stock market educators can only use stock prices with a three-month lag. This means that finfluencers are prohibited from using market price data from the preceding three months in their talks, videos, or any other form of content1. The regulator emphasised that such individuals should not indicate future prices, advice, or recommendations related to securities.

SEBI's crackdown also includes a mandate that any person providing advice on securities must first register with the regulator. Additionally, regulated entities like stock exchanges, mutual fund distributors, stock brokers, and depositories are prohibited from associating with unregistered financial influencers.

“Such person (someone who is engaged solely in education) 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," SEBI said in a circular.

The move is expected to impact the relevance and engagement of finfluencers, as many followers rely on real-time updates for trading decisions. Financial influencers who promoted specific brokers or investment platforms will now have to focus on more general awareness rather than product endorsement.

SEBI's enhanced oversight has already led to a reduction in brand deals for financial influencers, with rates dropping by 40-60%. Brands are now more cautious and prefer to work with influencers who provide consistent, risk-averse advice on long-term financial products.


AI Masterclass for Students. Upskill Young Ones Today!– Join Now