Unregistered Investment Advisors Are Ruled Out: SEBI Chief

Mumbai
Regulated participants in the securities market such as stockbrokers and mutual fund houses won’t be allowed to associate with unregistered investment advisors, under a new regulatory framework that will soon be proposed, according to the Chairperson of Securities and Exchange Board of India (Sebi). In a few months, we will bring out a consultation paper. In the paper, one important element will be that our regulated entities, such as exchanges or brokers or mutual funds, cannot associate with unregistered entities… be it through advertising, equity, profit sharing or referral fee, said Madhabi Puri Buch. Buch was speaking at a press conference after the Sebi Board meeting on June 28. Currently, many finfluencers make a large part of their revenue by sharing promotional/referral links of broking platforms, mostly in their content descriptions. While a recent communication from the exchanges have asked regulated entities such as brokerages not to advertise through celebrity finfluencers those with over a million followers brokerages can advertise through smaller finfluencers if the content is cleared by the exchanges before publishing. Buch said that there have been discussions over the previous few Board meetings about the increasing number of finfluencers and the stand Sebi should take. She added that regulator’s thoughts on this issue are crystallising and that a consultation paper would be out soon.