SEBI investigates top finfluencer for stock advice, masked as education
The regulator had issued strictures against individuals indulging in such activities
The Securities and Exchange Board of India (SEBI) has investigated a well-known financial influencer in its enforcement action against persons advising on stock recommendations, without the required registration.
SEBI’s Whole-Time Member Kamlesh Varshney stated, “We have carried out a big search operation on a big name in this industry. I must give credit to my team, which has been working on it. I can’t comment further until we examine the evidence that has been collected.”
Top financial influencers have been on the radar of the market regulator for stock recommendations under the garb of investor education. SEBI had issued strictures against individuals indulging in such activities.
Varshney explained that enforcement action was a must to restore confidence in consumers. He added, “For impact, the enforcement action must be directed at prestigious names. The idea is to create fear in the market that the regulator is watching you.”
He acknowledged that some ‘good persons’ focus on investor education, but there are others who misguide youth by giving investment calls and guaranteeing returns.
Meanwhile, market regulations mandate that research analysts and investment advisors, providing recommendation on investments or trades, must be registered.
Earlier, SEBI had removed social media content and misleading links about stock recommendations from those without registration. It is also working on automation through new tools to identify any possible violations in the market.
At the FICCI Annual Capital Markets Conference, Varshney stated, “We have live data. We can put technology on it and catch a whole lot of violations.”
To expedite Initial Public Offering (IPO) clearances, SEBI received 31 applications during July, of which 21 were processed. It is likely to process another 35-40 applications this month.
Varshney explained, “We saw that the number of applications is suddenly rising. Though we increased our processing capacity to 15 per month in the first three months this year, that’s not enough.”
In 2024, SEBI processed 13 IPO applications a month, with an average of 16 applications.
Varshney stated that after SEBI’s approval, several companies were waiting to enter the market. However, we do not want a backlog of more than 2-3 months, unless there’s some violation or complication.
He added that SEBI was considering regulating the grey market for better price discovery, investor interest and tax collection.