SEBI to Notify Finfluencer Regulations Soon: Chairperson Madhabi Puri Buch

SEBI Chairperson Madhabi Puri Buch announced upcoming regulations on financial influencers. The new rules will combat misinformation by prohibiting associations with unregistered individuals while allowing educational content. SEBI also proposes tighter derivative trading norms to protect retail investors from high-risk returns.

The Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch revealed during a National Stock Exchange (NSE) event on Tuesday that new regulations on financial influencers, or 'finfluencers,' will be announced soon. 'We recently had a regulation which we will be notifying soon on these issues of finfluencers,' she stated.

In June, SEBI approved rules aimed at curtailing misinformation spread by finfluencers, prohibiting regulated entities from associating with unregistered individuals. Despite this, the rules allow finfluencers to share educational knowledge for investor education. Financial influencers often share advice on platforms such as Instagram and YouTube.

SEBI directed regulated entities and registered investment advisors to avoid associating with finfluencers. On Tuesday, SEBI also proposed tighter norms to protect small retail investors involved in derivative trading. They introduced a consultation paper proposing an increase in the minimum contract size for Futures & Options (F&O) trading from Rs 5-10 lakh to Rs 15-20 lakh initially, and further to Rs 20-30 lakh in later stages.

The SEBI Chairperson emphasized that higher contract sizes could deter retail investors from risky derivative trading. 'We consult when we want to change something. It's human nature that those who oppose change will be vocal, while those in favor remain silent, hence we rely on data and logic,' she said.

She further remarked on the complexity of market regulation, noting that it's essential to consider every viewpoint to avoid unintended consequences. 'Every perspective must be heard and considered to ensure balanced regulation,' Buch added. (ANI)

(With inputs from agencies.)