SEBI chief and our Hon’ble Finance Minister have addressed the concerns related to FinFluencers recently in their media bites.

There is a thin line of difference between providing general awareness in financial matters and giving advice. Without realizing the same, in recent times, many FinFluencers in search of more viewership have crossed that line and ventured into an area which is under regulatory purview.

The financial acumen of FinFluencers is not being questioned here, but if some regulated area is ventured into, it is expected to be done following the applicable compliances.

Now that the regulator is taking due consideration on the concerns raised by some of the registered advisors and in many cases aggrieved investors as well, the action is being initiated against the FinFluencers operating without registration. Life is easy for the FinFluencers, who have realised the importance of being compliant while operating in the regulated regime.

In its first jab at FinFluencers, SEBI had initiated action against Mr. PR Sundar. A Show cause notice was issued to him and his company for providing advisory services without obtaining the requisite registration from SEBI. Eventually, Mr. Sundar and his company filed a settlement application in the matter. The settlement proceeding resulted in a payment of more than INR 6.5 Crores and a debarment from buying, selling or dealing in securities for one year.

The kind of action taken by the regulated indicates the future course in the same line against the FinFluencers. It should be taken as a wake-up call by all the FinFluencers operating in the market. It is to realize that this kind of harsh outcome is usually taken against unregistered investment advisory services. Now, that the same view has been established against FinFluencers, its better to analyse the content you disseminate on any social media platform and take an appropriate view, which can be either of the two as below-

1. Design your content to keep the same out of the regulatory ambit, which means not to venture into the regulated territory of financial planning or advice. Here you need to be cautious about your choice of words. Lay low and wait for SEBI guidelines for FinFluencers to decide a future course of action.

Or

 2. To get yourself registered with SEBI as an Investment Adviser and follow the compliance, if you wish to operate worry-free in a regulated territory of financial planning.

It is understood that operating long-term requires a certain amount of discipline, in terms of compliance with the regulatory regime and not coming under a regulatory lens. The amount of settlement warrants some amount of seriousness on the matter.

All the best for your social media journey…..