The Securities and Exchange Board of India (SEBI) will soon notify regulations targeting financial influencers, popularly known as finfluencers, SEBI Chairperson Madhabi Puri Buch said during an event held at the National Stock Exchange (NSE) on Tuesday.
“We recently had a regulation which we will be notifying soon on these issues of influencers,” Buch said at the event.
In June, SEBI approved new rules aimed at curbing misinformation spread by Financial influencers, or finfluencers. These rules prohibit SEBI-regulated entities from associating with unregistered individuals providing financial advice. However, the regulator has made an exception for those offering educational content to inform and educate investors.
Finfluencers are individuals who share financial advice and insights on platforms like Instagram and YouTube. SEBI’s directive specifically restricts registered investment advisors and regulated entities from collaborating with these influencers unless they are registered.
SEBI proposed tighter regulations to protect small retail investors from high-risk returns in derivative trading. A consultation paper released on Tuesday suggested increasing the minimum contract size for futures and options (F&O) trading from the current Rs 5-10 lakh to Rs 20 lakh. SEBI plans to implement this increase in phases, starting with Rs 15-20 lakh and eventually reaching Rs 20-30 lakh.
The proposed increase in contract size is intended to deter retail investors from engaging in high-risk derivative trading. Buch emphasized the importance of a thorough consultation process in regulatory changes.
“We do consultation when we want to change something. It is human nature that those who are in favour of change will keep quiet; those who are not in favour of change will shout. This is why SEBI relies on data and logic,” she said.
“We must hear every point of view because the market is so complex. Anything that we do on one side may have unintended consequences. It is to make sure that every perspective has been heard and considered, and then a balanced view is taken by the regulator” buch added.