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SEBI circular specifies that individuals claiming to offer education should not use market price data from the last three months
SEBI
To curb finfluencers from promoting stock tips on social media platforms under the guise of “educational purposes only,” the markets regulator, SEBI, has issued a draft circular limiting the use of up-to-date share price data.
The circular specifies that individuals claiming to offer education should not use market price data from the last three months to discuss, display, or mention any security—whether by name or code—and should not make predictions, provide advice, or recommend securities.
SEBI clarified that anyone involved purely in education cannot provide direct or indirect advice or recommendations related to securities unless they are a registered advisor.
According to the new rules, non-registered finfluencers are also prohibited from making explicit or implied claims about returns or performance.
SEBI has warned that those violating its guidelines could face penalties, suspension, cancellation of registration, or debarment.
In response to growing concerns about finfluencers with limited knowledge and biased views influencing stock prices, SEBI amended its norms last year to better regulate unregistered entities.
The updated rules also prevent regulated entities like mutual fund houses, research analysts, registered investment advisors, and stock brokers from collaborating with unregistered finfluencers.
Recently, SEBI took action against finfluencers such as ‘Baap of Chart,’ Ravindra Balu Bharti, and PR Sundar for violating its regulations.
