Home   »   Banking Current Affairs 2023   »   RBI not to regulate social media...

RBI not to regulate social media influencers

RBI not to regulate social media influencers

The Reserve Bank of India (RBI) has announced that it currently has no plans to introduce separate regulations for social media influencers in the financial markets, stating that the Securities and Exchange Board of India (SEBI) already has measures in place to address the issue.

Buy Prime Test Series for all Banking, SSC, Insurance & other exams

RBI not to regulate social media influencers: Key Points

  • SEBI has been considering directives to restrict the influence of financial influencers such as brokers and mutual funds disseminating financial advice through social media platforms.
  • Despite expressing its intention to introduce regulations in January 2022, no official guidelines have been issued by SEBI.
  • The watchdog has been taking selective action against individuals involved in manipulative practices, such as Youtubers and influencers like PR Sundar, who has paid a fine of INR6.5 crore and accepted a one-year ban from the market for alleged violations of investment adviser norms.
  • The collection of payments for services provided was facilitated through a payment gateway connected to the bank account of Mansun Consultancy, a company co-promoted by Sundar.

What are the SEBI findings?

  • SEBI discovered that the firm conducted securities activities without possessing a registered investment advisory business in violation of regulations.
  • To settle the case, Sundar, Mansun Consultancy, and co-promoter Mangayarkarasi Sundar agreed to pay ₹46.80 lakh and return ₹6 crore in profits and interest earned from advisory services.

The Advertising Standards Council of India established standards for financial influencers who may impact purchasing and investing decisions.

What’s New and Important?

  • The Australian Securities & Investment Commission mandated that social media influencers obtain a license for providing financial advice, and any violators would face hefty fines and a prison sentence.
  • The SEBI Act of 1993 and Section 12 A of SEBI (prohibition of fraudulent & unfair trade practices relating to securities market) regulations 2003 prohibit abusive market practices, including deceptive, fraudulent, unfair, or manipulative trade practices via any scheme or device involving securities or issues.

Find More News Related to Banking

RBI not to regulate social media influencers_4.1

Federal Bank Launches 'I am Adyar, Adyar is Me' Campaign in Chennai_100.1