India's Financial Watchdog Cracks Down on Finfluencers: Striking a Balance Between Free Speech and Market Integrity

Sebi Chairperson Tuhin Kanta Pandey on Regulating Finfluencers

The Securities and Exchange Board of India (Sebi) is taking a firm stance against finfluencers who spread misinformation on social media. Sebi chairperson Tuhin Kanta Pandey recently stated that the regulator's rules on finfluencers are clear, and it's essential to balance fundamental freedoms with the risks of misinformation circulating on social media.

Recent Action Against Finfluencers

Sebi recently took action against Avadhut Sathe and his Avadhut Sathe Trading Academy, barring them from participating in the securities market and impounding ₹546.16 crore in alleged unlawful gains. This move sends a strong message to finfluencers who offer unregistered investment advisory and research services under the guise of stock market education.

Regulations and Surveillance

Pandey emphasized that Sebi's existing framework provides clarity on what constitutes investment advice. The regulator is using surveillance on stocks and social media to monitor finfluencers and prevent pump-and-dump schemes. Sebi has also introduced verification and instructions to flag unverified claims.

• Sebi is focusing on continuous surveillance and removal of misleading content on social media.
• The regulator acknowledges the importance of freedom of expression and right to education, but also recognizes the need to protect investors from misinformation.

Optimum Regulations

Pandey outlined Sebi's philosophy of optimum regulations, which aims to strike a balance between regulating the market and avoiding over-regulation. He emphasized the importance of reviewing and updating regulations to ensure they remain effective and do not burden the entire ecosystem.

Sebi is working with industry stakeholders, media, and other parties to develop effective regulations that achieve their intended purpose. The regulator is also leveraging to assess the effectiveness of its regulations and make data-driven decisions.

Preparing for the Future of Finance

The 18th Mint BFSI Summit brought together influential voices to discuss the future of finance in India. The summit's theme, Finance's Next Frontier, highlighted the need for the banking, fintech, insurance, and markets sectors to prepare for a new era of challenges and collaboration.