Finance influencers through engaging content and expert insights, simplify complex financial concepts and offer personalized advice, influencing how individuals manage their money and make investment choices. Their impact extends from everyday budgeting to strategic financial planning.

However, with rising worries about unregulated influencers giving biased or misleading advice, the Securities and Exchange Board of India's new rules hold them accountable for what they recommend.

In three separate announcements, SEBI has set new rules limiting connections between its regulated entities and unregistered individuals. The new rules forbid SEBI-regulated entities and their agents from engaging in transactions, referring clients, or interacting with anyone who provides financial advice or makes claims about returns.

SEBI-regulated entities and their agents must not have any direct or indirect ties with those who give advice or recommendations about securities. As per the regulator, "No person regulated by the Board (Sebi) or the agent of such a person shall have any direct or indirect association, with another person who provides advice or any recommendation, directly or indirectly, in respect of or related to a security or securities, unless the person is registered with or otherwise permitted by the Board to provide such advice or recommendation; or makes any claim, of returns or performance expressly or impliedly, in respect of or related to a security or securities, unless the person has been permitted by the Board to make such a claim."

The regulations require financial influencers to register with SEBI and adhere to specific guidelines, setting a standard for accountability and expertise. This ensures that mutual fund houses, research analysts, registered investment advisors, and stockbrokers avoid partnering with influencers, though there is a limited exception for educational initiatives, provided influencers do not give recommendations or make performance claims.

To put these changes into action, SEBI has updated the rules for depository participants, intermediaries, and securities contracts.

SEBI Amends Regulations For FinInfluencers: What You Need To Know?