SEBI Approves New Regulations For Financial Influencers. Here's What Has Changed

SEBI's move aims to bring transparency and accountability to the activities of these influencers, ensuring better protection for investors

The Securities and Exchange Board of India (SEBI) on Thursday approved new norms to regulate unregistered financial influencers, commonly known as finfluencers. This decision addresses growing concerns over the potential risks posed by these influencers, who often provide biased or misleading advice while operating on a commission-based model.

In a statement released after its board meeting, SEBI noted the need to mitigate risks associated with finfluencers. The regulator's move aims to bring transparency and accountability to the activities of these influencers, ensuring better protection for investors.

Additionally, SEBI introduced a fixed price process for the delisting of frequently traded shares and a new delisting framework for Investment and Holding Companies (IHCs). These measures are part of a broader effort to streamline market operations and enhance regulatory oversight.

The board also approved a proposal to remove financial disincentives for Managing Directors (MDs) and Chief Technology Officers (CTOs) of exchanges and other market infrastructure institutions (MIIs) affected by technical glitches. This step is expected to encourage more effective management and resolution of technical issues.

In a bid to improve transparency and reduce compliance burdens, SEBI also recommended combining pre-issue and price band advertisements into a single advertisement. The regulator also proposed using QR codes for quick access to certain disclosures and mandating the disclosure of pre-issue and post-issue shareholdings for promoters, promoter groups, and the top 10 additional shareholders.

These proposals stem from recommendations by an expert committee chaired by SK Mohanty, a former Whole-Time Member of SEBI. The committee's suggestions aim to simplify business operations, clarify regulatory requirements, and reduce compliance costs while maintaining robust investor protection.

Public comments on these recommendations are invited until July 17, as part of SEBI's consultative approach. Among the proposed changes, SEBI suggested that filings made on one stock exchange be automatically shared with other exchanges through an API-based integration being jointly developed by stock exchanges.

Furthermore, SEBI proposed system-driven disclosures for certain filings, such as shareholding patterns and credit rating revisions. It also suggested that publishing detailed advertisements of financial results in newspapers should be optional for listed entities, provided that curated links to this information are available on the websites of both the entities and the stock exchanges.

These initiatives reflect SEBI's commitment to modernising regulatory frameworks and ensuring that the Indian securities market remains transparent, efficient, and investor-friendly.