Finfluencers Must Disclose Sebi Registration Number, Qualifications On Social Media And Other Platforms: ASCI
Aug 18, 2023
In response to market concerns, ASCI tightens rules for financial influencers, making it mandatory for them to register with Sebi and disclose qualifications to ensure transparency.
The Advertising Standards Council of India (ASCI) has made it mandatory for financial advisors or “finfluencers” to register with the Securities and Exchange Board of India (Sebi) and disclose their credentials in its revised advertising guidelines.
The ASCI circular on August 17, 2023, says this applies to all finfluencers working in the banking, financial services, and insurance (BFSI) sector offering investment advice.
Further, financial experts possessing certifications from recognised institutions must clearly “disclose” their certified expert status and credentials.
Finfluencers, who counsel investors on stocks and mutual funds, must also prominently display their Sebi registration number and qualifications in adverts or on social media platforms.
In the case of other financial advice, they must have appropriate credentials, such as a license from the Insurance Regulatory and Development Authority of India (IRDAI), chartered accountancy (CA), or a company secretaryship. Adherence to disclosure is a prerequisite.
These guidelines will be applicable whenever they disseminate information, endorse products or services, or make assertions about commercial goods and services.
In the press release, ASCI stated, “Influencers providing advice or promoting or commenting on merits or demerits related to commercial goods and services, banking, financial services, and insurance and health and nutrition, must have the necessary qualifications and certifications to provide such information and advice to consumers.”
The guidelines also state that all advertisements posted by social media influencers “must carry a disclosure label that identifies it as an advertisement”. Of late, financial influencers have attracted increased scrutiny following cases of unethical trading practices in the stock market.
The new guidelines are in response to concerns about potential risks linked with misleading and deceptive advertising content within critical sectors like BFSI and health and nutrition products and services. The guidelines, originally introduced in May 2021, were aimed at helping consumers identify promotional content and make informed decisions. The ASCI has now amended them to boost the transparency and safety of investors on digital platforms.
Manisha Kapoor, CEO and Secretary General of ASCI, said, “Unlike celebrities whom consumers know the fields they belong to, consumers may not know which influencers have the necessary qualification and expertise to provide the right advice and inform them of risks.”
She added that these additional requirements should be followed to safeguard consumers.
[Outlook Money]
