{"id":34792,"date":"2022-11-19T08:48:17","date_gmt":"2022-11-19T03:18:17","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=34792"},"modified":"2025-04-20T17:19:10","modified_gmt":"2025-04-20T11:49:10","slug":"sebi-plans-regulations-for-finfluencers","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/sebi-plans-regulations-for-finfluencers\/","title":{"rendered":"SEBI Plans Regulations for \u2018Finfluencers\u2019"},"content":{"rendered":"<h3><strong>What\u2019s in today\u2019s article?<\/strong><\/h3>\n<ul>\n<li><strong>SEBI (about, structure, powers)<\/strong><\/li>\n<li><strong>Finfluencers<\/strong><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Why In News?<\/strong><\/h2>\n<ul>\n<li>The Securities and Exchange Board of India (SEBI) is working on guidelines for financial influencers \u2014 popularly known as \u2018finfluencers\u2019.<\/li>\n<li>The SEBI move follows a sharp rise in the number of various \u2018unregistered\u2019 investment advisors giving unsolicited social media \u2018stock\u2019 tips on various social media platforms.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>In Focus: Securities and Exchange Board of India (SEBI)<\/strong><\/h2>\n<ul>\n<li>It was established in April 1988 as an\u00a0executive body\u00a0and was given statutory powers in January 1992 through the SEBI Act, 1992.\n<ul>\n<li>It monitors and regulates the Indian capital and securities market while ensuring to protect the interests of the investors, formulating regulations and guidelines.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><strong>Members of SEBI<\/strong><\/h3>\n<ul>\n<li>SEBI is run by a board of directors, whose members include:\n<ul>\n<li>the chairman nominated by the Union Government<\/li>\n<li>two officers from the Ministry of Finance,<\/li>\n<li>one member from the Reserve Bank of India, and<\/li>\n<li>five members who are also nominated by Union Government<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><strong>Power of SEBI<\/strong><\/h3>\n<ul>\n<li><strong>Quasi-Judicial<\/strong>\n<ul>\n<li>SEBI has the authority to deliver judgements related to fraud and other unethical practices in terms of the securities market.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Quasi-Executive<\/strong>\n<ul>\n<li>SEBI is empowered to implement the regulations and judgements made and to take legal action against the violators.<\/li>\n<li>It is also authorised to inspect Books of accounts and other documents if it comes across any violation of the regulations.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Quasi-Legislative<\/strong>\n<ul>\n<li>SEBI reserves the right to frame rules and regulations to protect the interests of the investors.<\/li>\n<li>Some of its regulations consist of insider trading regulations, listing obligations, and disclosure requirements.<\/li>\n<li>Despite the powers, the results of SEBI\u2019s functions still have to\u00a0<u>go through the Securities Appellate Tribunal and the Supreme Court of India<\/u>.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Finfluencers<\/strong><\/h2>\n<ul>\n<li>They are people with public social media platforms offering advice and sharing personal experiences about money and investment in stocks.<\/li>\n<li>Their videos cover budgeting, investing, property buying, cryptocurrency advice and financial trend tracking.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Need to regulate finfluencers<\/strong><\/h2>\n<ul>\n<li>There has been a sharp rise in the number of various \u2018unregistered\u2019 investment advisors giving unsolicited social media \u2018stock\u2019 tips on various social media platforms.<\/li>\n<li>There were also reports that certain companies used social media platforms to boost their share prices through such finfluencers.\n<ul>\n<li>Recently, an online portal claimed that finfluencers get paid Rs 7 to 9 lakh per endorsement to push financial products on social media.<\/li>\n<\/ul>\n<\/li>\n<li>There are two important aspects which requires attention:\n<ul>\n<li>It is unclear if these influencers have any\u00a0<u>educational or professional qualification<\/u>\u00a0to offer such financial advice, and<\/li>\n<li>If there is any kind of\u00a0<u>monetary transaction that happens between them and the entity they are promoting.<\/u><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Criticism against regulations<\/strong><\/h2>\n<ul>\n<li>Critics claim that finflencers render advice to their followers which comes under the\u00a0<u>ambit of Freedom of Expression of the Constitution<\/u>.<\/li>\n<li>Followers are not forced to take action based on the recommendations of<\/li>\n<li>They point towards the fact that often celebrities endorse certain products without having any expertise. Also, they take money to promote the products. Thus regulating the finfluencers would be improper.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>SEBI monitors and regulates the Indian capital and securities market.<\/p>\n","protected":false},"author":5,"featured_media":34793,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-34792","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/34792","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=34792"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/34792\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/34793"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=34792"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=34792"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=34792"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}