Market regulator Sebi is working on guidelines to regulate financial influencers on Twitter and Telegram and other social media platforms, said news reports on Thursday.
Securities and Exchange Board of India said lot of financial advice is being given on social media without regulation, reported ET Now channel.
Moneycontrol quoted S K Mohanty, whole-time member of Sebi, as saying that Sebi is “working on the guidelines”. He reportedly spoke on the sidelines of ‘Corporate Frauds: Governance and Risk Management’ seminar organised by industry body CII.
The rise of financial influencers has been a dilemma for Sebi, especially after the surge in trading by retail investors post Covid. “In FY22, there were 415 instances of violations by influencers and celebrities in finance- and cryptocurrency-related content,” reported Moneycontrol.
Influencers with sizable followings on Instagram, Twitter, and Facebook have frequently been recruited by businesses to post on social media supporting and suggesting their shares, which has led to disproportionate rise in the share prices.
Madhabi Puri Buch, chairperson, Sebi said in September that the regulator will have to use a ‘segmented’ approach towards handling the issues of unsolicited tips on social media. She said, “I think it’s early days yet given the complex nature of this issue. We are in active discussions with the industry and various stakeholders and it will take us some time. We do not have visibility on easy solution yet.”
Earlier in March, Sebi conducted search and seizure operations at multiple premises in Ahmedabad and Bhavnagar in Gujarat, Neemuch in Madhya Pradesh, Delhi, and Mumbai, in its efforts to unearth market misconduct.
During the investigation, Sebi officials seized various records and documents including 34 mobile phones, six laptops, four desktops, four tablets, two hard drive disks, and one pen drive from the custody of these persons. These entities, according to the regulator, were operating nine Telegram channels with more than five million subscribers to whom they were making recommendations on select listed stocks.
