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Acting tough against finfluencers, SEBI has proposed that the market intermediaries which include mutual fund companies and registered investment advisors cannot engage with finfluencers directly or indirectly.
SEBI said, “No SEBI registered intermediaries/regulated entities or their agents/representatives shall, directly or indirectly, have any association/relationship in any form, whether monetary or non-monetary, for any promotion or advertisement of their services/products, with any unregistered entities (including finfluencers).”
Further, SEBI clarified that AMCs, PMS or AIF cannot pay trail commission to finfluencers. SEBI said, “SEBI registered intermediaries/regulated entities shall not pay any trailing commission based on the number of referrals as referral fee.”
Also, SEBI regulated entities can take legal action against finfluencers, clarified the market regulator.
If an MFD is a finfluencer, he has to disclose all necessary information. SEBI said, “Finfluencers registered with SEBI, stock exchanges or AMFI will have to display their appropriate registration number, contact details, investor grievance redressal helpline and make appropriate disclosure and disclaimer on any posts. They shall also fully adhere to the code of conduct under the terms of their relevant registration.”
SEBI defined finfluencers as, “As per the ‘Guidelines for Influencer Advertising in Digital Media’ released by Advertising Standards Council of India, ‘influencer’ means “someone having access to an audience and power to affect such audiences’ purchasing decisions or opinions about a product, service, brand or experience, because of the influencer’s authority, knowledge, position, or relationship with their audience."
