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The impact of social media financial influencers on investors has resulted in an effect on the securities of companies and the fairness of the financial market. SEBI seeks to introduce norms to regulate these financial influencers and restrict their impact.

SEBI regulations for social media financial influencers

Investing in the financial market requires the investor to be updated with the latest information about companies, securities, and other finance-related news. With the advent of technology and social media, investors have started relying on influencers for financial information. SEBI is looking to regulate this information flow and ensure that any false information does not impact the investor or a company in the financial market.

What are Social Media Financial Influencers?

Social media financial influencers are self-proclaimed experts on social media who provide information and advice to investors. While some of these influencers rely on actual data from verified sources to provide information, some falsify information provided to investors. These influencers offer unsolicited advice on investments across various social media platforms and can impact the investor's strategy in the financial market. 

Why do we require SEBI norms to regulate social media financial influencers?

It is crucial to introduce new SEBI norms to regulate these influencers, as these practices can harm the interests of investors and companies in the financial market. SK Mohanty (WTM, SEBI) stated that SEBI is working on guidelines for these financial influencers.  

Madhabi Puri Buch (Chairperson, SEBI) stated in a board meeting conducted in September that the nature of the issue is highly complex, and it will take some time to get an idea of how to proceed further.

Social media financial influencers can provide unsolicited advice or falsified information to investors. This practice can have an impact on financial securities and investors. SEBI wants to prevent changes in the prices of securities or trading patterns of investors due to falsified information.

There have been instances where specific influencers have endorsed purchasing a particular company's stock and manipulating the demand. In March 2022, SEBI searched different locations in Gujarat, Madhya Pradesh, and New Delhi. SEBI received information that specific influencers are circulating messages about a company manipulating the stocks. SEBI got hold of seven individuals and a company illegally manipulating stocks through social media.

The primary intention behind these norms is to prevent the manipulation of stock prices. Social media influencers must be accountable and transparent so that the investors can understand if they are being fed the wrong information. 

What would the new SBI norms be for social media influencers?

Since no guidelines have been created previously for such an issue, it is hard to say what the norms would be like. However, it is guaranteed that SEBI would have to find a mid-way between freedom of speech and ensuring that falsified information is not provided to the investors. The norms will restrict the social media influencers or at least make them accountable. Social media influencers will have to refrain from providing information from unverified sources and understand their actions' impact on the public's interests.

Social Media financial influencers must be held accountable for the information they provide to investors. Most of these influencers are making money off the views and even directly from investors. Unsolicited advice and fraudulent information can harm investors and companies in the financial markets.

Investing in the financial market requires the investor to be updated with the latest information about companies, securities, and other finance-related news. With the advent of technology and social media, investors have started relying on influencers for financial information. SEBI is looking to regulate this information flow and ensure that any false information does not impact the investor or a company in the financial market.

What are Social Media Financial Influencers?

Social media financial influencers are self-proclaimed experts on social media who provide information and advice to investors. While some of these influencers rely on actual data from verified sources to provide information, some falsify information provided to investors. These influencers offer unsolicited advice on investments across various social media platforms and can impact the investor's strategy in the financial market. 

Why do we require SEBI norms to regulate social media financial influencers?

It is crucial to introduce new SEBI norms to regulate these influencers, as these practices can harm the interests of investors and companies in the financial market. SK Mohanty (WTM, SEBI) stated that SEBI is working on guidelines for these financial influencers.  

Madhabi Puri Buch (Chairperson, SEBI) stated in a board meeting conducted in September that the nature of the issue is highly complex, and it will take some time to get an idea of how to proceed further.

Social media financial influencers can provide unsolicited advice or falsified information to investors. This practice can have an impact on financial securities and investors. SEBI wants to prevent changes in the prices of securities or trading patterns of investors due to falsified information.

There have been instances where specific influencers have endorsed purchasing a particular company's stock and manipulating the demand. In March 2022, SEBI searched different locations in Gujarat, Madhya Pradesh, and New Delhi. SEBI received information that specific influencers are circulating messages about a company manipulating the stocks. SEBI got hold of seven individuals and a company illegally manipulating stocks through social media.

The primary intention behind these norms is to prevent the manipulation of stock prices. Social media influencers must be accountable and transparent so that the investors can understand if they are being fed the wrong information. 

What would the new SBI norms be for social media influencers?

Since no guidelines have been created previously for such an issue, it is hard to say what the norms would be like. However, it is guaranteed that SEBI would have to find a mid-way between freedom of speech and ensuring that falsified information is not provided to the investors. The norms will restrict the social media influencers or at least make them accountable. Social media influencers will have to refrain from providing information from unverified sources and understand their actions' impact on the public's interests.

Social Media financial influencers must be held accountable for the information they provide to investors. Most of these influencers are making money off the views and even directly from investors. Unsolicited advice and fraudulent information can harm investors and companies in the financial markets.