The Securities and Exchange Board of India (SEBI) has barred financial influencers from using real-time stock prices in their videos. In a circular introducing the new regulation, SEBI said that content creators in the field of stock market education could use prices from three months ago instead of real-time prices.
The new rule aims to limit the influence of financial influencers, often referred to as “finfluencers,” who offer stock market advice without being officially registered as investment advisers. The ban on live market prices in educational content is designed to protect investors from being potentially misled due to harmful advice.
Many finfluencers, who aren’t officially registered as investment advisers, often give stock tips or market predictions based on live prices. SEBI emphasised that they should not predict future prices or give recommendations related to securities, adding this could lead to risky decisions or even market manipulation.
SEBI intends to make stock market education more focused on knowledge rather than real-time trading, reducing the risk of people being misled by unregulated influencers. The new regulation also aims to prevent impulsive investment decisions driven by short-term market fluctuations. It also mandates influencers to first register with SEBI if they wish to provide stock market advice.
In October, the SEBI restricted registered entities such as mutual fund distributors, stock brokers, stock exchanges, and depositories from associating with unregistered entities.
“Such person (someone who is engaged solely in education) 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,” SEBI stated in the circular.