Active Stocks
Thu Feb 29 2024 15:49:54
  1. Kotak Mahindra Bank share price
  2. 1,690.80 0.43%
  1. Axis Bank share price
  2. 1,075.70 0.10%
  1. Tata Steel share price
  2. 140.90 0.11%
  1. Power Grid Corporation Of India share price
  2. 282.55 1.07%
  1. ITC share price
  2. 406.50 -0.51%
Business News/ News / India/  RBI not to regulate social media influencers; governor Shaktikanta Das explains why

RBI not to regulate social media influencers; governor Shaktikanta Das explains why

The Reserve Bank of India (RBI) has no immediate plans to introduce separate regulations for financial market influencers.

RBI Governor Shaktikanta Das (File Photo)Premium
RBI Governor Shaktikanta Das (File Photo)

The Reserve Bank of India (RBI), in a recent announcement,has stated that it does not have any immediate plans to introduce distinct regulations governing the activities of social media influencers in the financial markets. The Securities and Exchange Board of India (SEBI), according to Governor Shaktikanta Das, already has measures in place to address this issue.

"The RBI is not planning to issue any separate guidelines to regulate financial market influencers since the Sebi is already doing so," PTI quoted Das as saying.

SEBI, the sector watchdog, has been actively considering directives to restrict the influence of financial influencers, such as brokers and mutual funds, in order to combat the proliferation of financial advice disseminated through social media platforms.

Also Read: Relief for fintechs as RBI okays default guarantee with a cap

While SEBI has expressed its intention to introduce regulations since January 2022, no official guidelines have been issued thus far. Nonetheless, the organisation has been taking selective action against individuals involved in manipulative practices.

Notable instances include the identification of market abuse through Telegram stock recommendations in January 2022, the clampdown on Youtubers in March 2023, and the recent imposition of fines on influencer PR Sundar in May 2023 for alleged violations of investment adviser norms.

PR Sundar, a prominent Youtuber and options trader, has settled the case by paying a fine of 6.5 crore and accepting a one-year ban from the market. This landmark action marks SEBI's first enforcement against a financial influencer.

SEBI's investigation revealed that Sundar operated the website, where he offered advisory services packages. Payments for these services were collected through a payment gateway linked to the bank account of Mansun Consultancy, a firm in which Sundar is a co-promoter. SEBI found that the company engaged in securities activities without a registered investment advisory business, contravening norms.

To resolve the case, Sundar, Mansun Consultancy, and co-promoter Mangayarkarasi Sundar have agreed to pay 46.80 lakh and disgorge 6 crore, representing the profits earned from advisory services and associated interest.

Also Read: Respite for real estate after RBI’s pause; here are 7 stocks that are attractive

Recently, Finance Minister Nirmala Sitharaman also addressed the concerns related to financial influencers and cautioned about the dangers posed by Ponzi apps offering financial solutions.

The Advertising Standards Council of India has laid down guidelines for influencers, who can influence purchasing and investing decisions.

In March 2022, the Australia Securities & Investment Commission asked social media influencers to have a licence to give financial advice, with violators facing a jail term and stiff fines.

Abusive market practices are prohibited under the provisions of the SEBI Act of 1993 and the SEBI (prohibition of fraudulent & unfair trade practices relating to securities market) regulations 2003.

Section 12 A of the SEBI Act prohibits any action of commission or omission relating to securities or issues, via any scheme or device amounting to deceptive practices, fraudulent trade practices, unfair trade practices or manipulative trade practices (collectively referred to as abusive market practices).

(With PTI inputs)

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Sounak Mukhopadhyay
Sounak Mukhopadhyay, who also goes by the name Sounak Mukherjee, has been producing digital news since 2012. He's worked for the International Business Times, The Inquisitr, and Moneycontrol in the past. He's also contributed to Free Press Journal and TheRichest with feature articles. He covers news for a wide range of subjects including business, finance, economy, politics and sports. Before working with digital news publications, he worked as a freelance content writer.
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
More Less
Published: 14 Jun 2023, 06:29 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App