The Securities and Exchange Board of India will soon notify the regulations on finfluencers, Madhabi Puri Buch, Chairperson of SEBI, said during an event held at NSE on Tuesday.
During the event, SEBI Chairperson said, “We recently had a regulation which we will be notifying soon on these issues of finfluencers.”
In June this year, SEBI approved new rules to combat misinformation spread by finfluencers by prohibiting its regulated entities from associating with any unregistered individuals. However, the regulator had exempted these persons from sharing educational knowledge to educate investors.
Financial influencers, or finfluencers, are people who share financial advice on various social media platforms like Instagram and YouTube, among others.
The regulator had directed the regulated entities or registered investment advisors not to associate with the finfluencers.
On Tuesday, SEBI proposed tighter norms to protect small retail investors from the high-risk returns in derivative trading.
The market regulator brought in a consultation paper with many proposed changes, including increasing the minimum contract size for F&O trading to Rs 20 lakh.
Currently, the minimum size required for the contract is Rs 5 lakh to Rs 10 lakh. SEBI has proposed to increase it to Rs 15-20 lakh in the first phase and then Rs 20-30 lakh in the second phase.
The regulator views that a higher value of contract size will deter retail investors from participating in it.
In her response to the consultation, the SEBI Chairperson said, “We do consultation when we want to change something. It is human nature that those who are in favour of change will keep quiet; those who are not in favour of change will shout (ye koi nahi baat nahi hai), which is why in SEBI we rely on data and of course logic.”
“We must hear every point of view because the market is so complex anything that we do on one side may have unintended consequences which we have not understood or imagined because it’s just complicated; everything is connected to everything,” she remarked.
“It is to make sure that every perspective has been heard and considered and then a balanced view is taken by the regulator,” the SEBI Chairperson said.
