MUMBAI: Securities and Exchange Board chairperson Tuhin Kanta Pandey has said the regulatory norms on finfluencers are “very clear,” and that they balance freedom of expression and misinformation circulating on social media that affects the larger public.
Recently, Sebi took one of its strongest actions punitive yet against a finfluencer Avadhut Sathe and his Avadhut Sathe Trading Academy from the securities market and also ordered impounding as much as Rs 546.16 crore in alleged unlawful gains for offering unregistered investment advisory and research services under the guise of stock-market education.
Asked whether Sebi is drafting new rules specifically to tackle misinformation and fraud linked to finfluencers, Pandey said the regulator’s existing framework already provides clarity.
“I don't think there is ambiguity—what constitutes investment advice is clear. In several pump-and-dump cases we have found finfluencers were involved. So, one part is surveillance on stocks and on social media to see what's going on… In disclosures, we have brought in verification and instructions that flagged claims are verified by the exchanges,” he told an event organized by the business daily Mint on Friday.
On the challenges posed by social media and right to education, Pandey said “with social media, enforcement cannot be sporadic. It has to be constant measures. Social media is such an area that there is need for continuous surveillance and removal.”
He also said people have the right to access information online. “There is a line between education—freedom of expression and people's fundamental rights have to be respected. Increasingly we have tools to distinguish where the lines are being crossed,” he said.
“We have to put our heads together, with industry, stakeholders, and the media, to work on optimum regulations. Looking at the market more systemically, improved surveillance is better to measure to address issues. Further, we will require data analysis and effectiveness of regulations to achieve intended purpose. No need to rush for regulations, they have to be thought out. Reacting on every week and 10 days basis is not practical,” he added.