According to news sources, the market regulator Sebi is developing rules to control financial influencers on Twitter, Telegram, and other social media platforms.
Financial advice is distributed widely on social media without supervision, according to the Securities and Exchange Board of India, as reported by the ET Now channel.
A brief about SEBI might release guidelines for people who have financial sway
According to S K Mohanty, a full-time Sebi employee, the organization is “working on the rules.” He reportedly spoke outside the CII-organized lecture “Corporate Frauds: Governance and Risk Management.”
For Sebi, the rise of financial influencers has been a problem, particularly in light of the increase in trading by ordinary investors following Covid. According to Moneycontrol, “influencers and celebrities violated the law 415 times in financial and cryptocurrency-related content in FY22.”
Businesses routinely hire social media influencers with substantial fan bases on Instagram, Twitter, and Facebook to post on social media in support of and advocating their shares, which has caused share prices to climb disproportionately.
Sebi’s head, Madhabi Puri Buch, stated in September that the regulator will need to take a “segmented” strategy to deal with the problems posed by unsolicited suggestions on social media. She stated: “Given the complexity of the situation, I believe it is still early. It will take some time because we are now having negotiations with the business community and many stakeholders. We are not yet aware of a simple answer.”
In an endeavor to uncover market wrongdoing, Sebi earlier in March carried out search and seizure operations at numerous locations in Ahmedabad and Bhavnagar in Gujarat, Neemuch in Madhya Pradesh, Delhi, and Mumbai.
34 mobile phones, six laptops, four desktops, four tablets, two hard drive discs, and one pen drive were taken from these people’s possession by Sebi officials throughout the course of the inquiry. The regulator claimed that these organizations ran nine Telegram groups with more than five million users where they offered advice on particular publicly traded stocks.
