SEBI Issues New Rules For Finfluencers, Tightens Norms For Stock Education

The regulator barred any individuals engaged in education regarding the stock market from using security name or code name and also cautioned them against giving any recommendations about trading.

The new rules came into effect from August 29, 2024, the regulatory body said.

Source : PTI

The Securities and Exchange Board of India announced some revisions to the norms for financial influencers on Wednesday. Issuing an official circular, the capital markets regulator said that finfluencers will not be allowed to use live stock market data in educational content anymore.

As per the norm, any individuals trying to educate about the stock market would be permitted to use only stock prices with a three-month lag, thus preventing them from providing real-time trading tips disguised in the form of education.

The regulator barred any individuals engaged in education regarding the stock market from using security name or code name and also cautioned them against giving any recommendations related to trading any securities. 

“A person engaged solely in education shall mean that such person is not engaged in any of the two prohibited activities. Such person should not be using the market price data of the preceding three months to speak/talk/display the name of any security including using any code name of the security in his/her talk/speech, video, ticker, screen share etc. indicating the future price, advice or recommendation related to security or securities,” the circular read.

This decision is expected to put an end to the advisory activities being run by several finfluencers who operate without any registration with the SEBI. Initially, the regulator curbed associations between registered and unregistered entities in its circular in October 2024, reported Business Standard.

The latest update, issued on January 29, 2025, enforces stricter rules in this regard. The new rules came into effect from August 29, 2024, the regulatory body said.

In addition to barring stock market educators from using live stock prices, the regulator said that investor education is allowed but these educators must refrain from imparting investment advise or make performance claims without gaining SEBI’s approval first.

Those found in violation of these rules risk penalties, suspension, cancellation of their SEBI license, the circular stated. “It is the responsibility of the persons regulated by Sebi to ensure that any person associated with them or their agent, directly or indirectly, does not engage in any of the above-mentioned two prohibited activities, directly or indirectly,” SEBI noted.