Finfluencers | 19 Nov 2022

The Securities and Exchange Board of India (SEBI) is working on guidelines for financial influencers — popularly known as ‘finfluencers’.

Finfluencers are people with public social media platforms offering advice and sharing personal experiences about money and investment in stocks.
- Their videos cover budgeting, investing, property buying, cryptocurrency advice and financial trend tracking.

The number of 'unregistered' investment advisors giving unsolicited 'stock' tips on social media platforms has increased dramatically.
In addition, certain companies used social media platforms to boost their share prices through finfluencers.
There is no difference between listed companies and non-listed companies when it comes to fraud, more so now that digital data thefts and technological risks are on the rise.
- Diversion of funds/ assets not only leads to erosion of wealth for shareholders, creates anarchy and financial crisis but also leads to ethical crisis and reputational risk.

About:
- SEBI is a statutory body established in 1992 in accordance with the provisions of the Securities and Exchange Board of India Act, 1992.
- The basic functions of the Securities and Exchange Board of India is to protect the interests of investors in securities and to promote and regulate the securities market.
- It’s headquartered is in Mumbai, India.
Structure:
- SEBI Board shall consist of the following members, namely: -
  - Chairman
  - Two members from amongst the officials of the Ministry of the Central Government dealing with Finance
  - One member from amongst the officials of the Reserve Bank of India
  - Five other members of whom at least three shall be the whole-time members to be appointed by the central Government.
- SEBI also appoints various committees, whenever required to look into the pressing issues of that time.
- Further, a Securities Appellate Tribunal (SAT) has been constituted to protect the interest of entities that feel aggrieved by SEBI’s decision.
- SAT consists of a Presiding Officer and two other Members.
- It has the same powers as vested in a civil court. Further, if any person feels aggrieved by SAT’s decision or order can appeal to the Supreme Court.