Abstract

This essay critically analyses the present regulations on Financial influencers or FinFluencers in India. It begins with the meaning of FinFluencer and its sudden rise, owing to multiple reasons such as the digital India movement and the COVID Pandemic. These FinFluencers are considered a boon for the Indian Share Market as they make ordinary people aware of the share market and investing. However, they can even inflict many problems if not appropriately regulated. They may be incompetent in giving financial advice and could cause loss to the investors, or they could even advertise shares for personal gain. The essay then discusses the Security and Exchange Board of India (SEBI) and its role in regulating India's share market and safeguarding ordinary investors' interests. However, the current regulations by the SEBI do not solve the issues concerning Financial Influencers. The SEBI should take cues from international organizations in terms of doing research and determining the impact of these FinFluencers on Indian markets and stakeholders in light of the global regulatory framework. To address these issues involving Financial Influencers, it becomes pertinent to take a few essential measures. First, we must have an unambiguous definition of ‘Financial Advice.’ This is because unless the term is defined, it would be impossible to regulate it. Further, there should be rules for mandatory and conspicuous disclosure when the influencer is advertising or promoting any entity. Consumers should be able to differentiate between genuine advice and an advertisement. Furthermore, inspiration can be drawn from foreign jurisdictions for the development of our own regulations on the issue, such as giving guidelines regarding the quality checks over a financial influencer or stating a minimum criterion of qualification required for a person to give advice. These measures will not only check the quality of advice provided but also prevent any incompetent person from starting to give advice on social media.

 

I. Introduction

These days, social media platforms are used for much more than just exchanging texts, family pictures, and videos. It now serves as more than just a forum for amusing discussions. Users increasingly depend on it for news, living tips, and especially money guidance, which is the hardest. Influencer marketing has flourished with millions of followers after capitalizing on the demand. This new occurrence has also grown in popularity due to the startling increase in marketplaces following the pandemic. Influencers, particularly in the financial industry, significantly affect a person's business choices. Financial influencers' primary material consists of instructional films on the economy, markets, investment guidance, and other personal finance-related advice.

 

Consumer behaviour seems to have radically changed in terms of processing information, owing to the accessibility and simplicity of learning other people's opinions on social media platforms. This has simultaneously had a drastic impact on decision-making. They have the ability to affect stock values or increase mutual fund (M.F.) options owing to their massive following. For SEBI, this has created a legal conundrum. The market supervisor intends to establish more definite rules to regulate and raise the accountability of FinFluencers, even though it is impossible for it to monitor every social media post.

 

SEBI is developing rules for financial influencers, or “FinFluencers”. The SEBI action comes in response to a sharp increase in the variety of “unregistered” investment advisers providing unsolicited social media “stock” recommendations on different social media platforms. There were reports that some businesses employed these FinFluencers to increase the share values of their stock on social media sites.

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II. Who are Financial Influencers or Finfluencers?

An individual who provides information and guidance to consumers on financial matters, typically on stock market trading, individual investments like mutual funds, and insurance, mainly through social media platforms, is known as a financial influencer or "FinFluencer." They might receive payment from the company providing the goods or services. These "FinFluencers" offer unlicensed assistance on social media platforms like Facebook, Twitter, YouTube, and Instagram. Due to a lack of standards and regulations, influencers frequently offer their members and subscribers a list of financial recommendations on various social media networks without a license.[1]

The very nature of the videos and material that FinFluencers post may be the simple explanation for why they are attracting a sizable following. They avoid using financial jargon and are accessible in a variety of regional languages in addition to English, making them simpler to comprehend. India's poor level of financial literacy may be another factor in the justification for this. According to a 2019 National Centre for Financial Education study, only 27% of people are financially literate.[2]

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III. Problems Inflicted by Finfluencers

FinFluencers are becoming more and more famous, which has not only caught the attention of authorities but also of followers. This has also increased the risks involved in sharing improper financial information on social media platforms, which could affect the financial situation of the fans of that influencer. Concerns about FinFluencer material can be found in the following areas:

A. Fraud

Persons are not allowed to engage in any manipulative or dishonest trading of stocks, either directly or tangentially, according to Section 12A of the Securities and Exchange Board of India Act, 1992 (SEBI Act)[3]. Additionally, specific business practices are listed in the SEBI (PFUTP Regulations), forbidding deceptive and unjust trade practices. The PFUTP Regulations, updated in January 2022 (2022 Amendment),[4] establish the idea of forbidding the reckless or negligent sharing of information or guidance.

In the U.S.A., this criterion for being negligent or reckless is well-established. In Sundstrand Corporation v. Sun Chemical Corporation[5], the U.S. Courts of Appeal defined "recklessness" as a situation in which the disseminator is not accountable for his "intent" but rather for his excessive carelessness, resulting in obvious risks. The 2022 Amendment now gives SEBI the same authority to penalise disseminators for recklessness or carelessness that puts purchasers or dealers of stocks at risk of being misled.

Following this 2022 Amendment, the SEBI acted against the self-described "Research analysts" who used Telegram to spread stock recommendations and defraud investors in the Stock Recommendations Using Social Media Channel (Telegram) case[6]. The SEBI Act and PFUTP Regulations were broken, leading to the passing of the ruling.

B. Conflict of Interest

Due to their fame, FinFluencers can engage in large quantities of securities in a brief amount of time. For example, a FinFluencer might encourage millions of followers to buy a company he has already invested in, which could increase the stock's price. There is a conflict of interest because the FinFluencer benefits from the shift in stock price. The GameStop short squeeze[7] incident is a prime example. Further, SEBI observed in Stock Recommendations Using Social Media Channel (Telegram)[8] that noticees had acquired a purchase stake for the companies they had suggested to their followers and that noticees would off-load their shares once the stock price increased, resulting in significant gains.

FinFluencers might occasionally receive payment from businesses or investors in exchange for disseminating knowledge about a particular company. The material published by the FinFluencer might not necessarily be inaccurate. However, a simple pitch might persuade inexperienced investors to buy the FinFluencer-recommended company.

SEBI must strike a delicate balance when governing FinFluencers to protect their right to free expression and prevent harm to the financial literacy they promote. FinFluencers do not, however, have the freedom to express whatever they please, particularly when it comes to situations where the advice is unethical or when there is a conflict of interest.

 

The aforementioned issues have been addressed in the traditional financial services and financial advisory sectors through laws and regulations, such as consumer protection laws or corporate laws, which specify that financial advisory activities must be carried out by licensed parties and under the watchful eye of financial regulators.

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IV. Need for Strict Regulations

It is tough to criticize a group of people who use social media to raise awareness of investing and trading in the stock market at the outset. Even if nothing else, this results in more focused interactions with viewers and increase interest in the stock market. There is, however, a negative aspect to this. FinFluencers frequently disseminate fake financial information because they lack the necessary credentials to do so, which causes the public to make poor financial choices. Such influencers escape with no responsibility due to a dearth of control. According to one of SEBI's full-time directors, to handle this problem, the Securities and Exchange Board of India (SEBI) is working to regulate such influencers and preparing to publish rules to bind them.

Therefore, the need for strictly regulating these financial influencers can be attributed to the following three points-

 

• There has been a sharp increase in the number of various unregistered investment advisors giving unsolicited social media stock tips on various social media platforms. With a rising investor base in the nation, the emergence of FinFluencers has put the Securities and Exchange Board of India in a regulatory dilemma. India had approximately 102.6 million Demat accounts as of the third quarter of the fiscal year of 2022-23. Mutual funds had about 41 million distinct participants as of March this year.[9] 

 

• There were reports that certain businesses employed these FinFluencers to increase the share prices of their stock on social media networks. Businesses frequently hire social media influencers with considerable followings on Instagram, Twitter, and Facebook to post on social media in support of and recommend their shares, which has caused share prices to increase disproportionately.[10]

 

• There are two crucial elements that need consideration:

 

1. It is unknown if these individuals have the educational background or credentials necessary to provide such financial advice and;

2. It becomes pertinent to note the existence of any form of financial exchange between the individuals and the entity they are endorsing. Regulations that forbid front-running, such as the requirement that personal assets and business ties be made public, apply to registered advisors. However, social media influencers who create material on various topics, including bonds, stocks, and derivatives trading, disseminate financial guidance disregarding these guidelines. While SEBI frowns upon conflicts of interest for registered intermediaries, social media stars frequently repurpose paid-for plugs as "free" instructional content and profit from their sizable fan bases by accepting sizable fees from financial firms. Some influencers have deceived retail consumers into buying uncontrolled goods like cryptocurrencies, non-fungible assets, and crypto "deposits."[11]

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V. Analysis of the Current Legal Regulations  

Presently have two important regulations that touch upon the issues of financial advice, the SEBI (Investment Advisers) Regulations, 2013, which define the term investment advice, further, we have the SEBI (Research Analysts) Regulation, 2014, which gives the definition and criteria of a Research Analyst. It also lays down the functions and liabilities of a Research Analyst. In this section, we will analyse the present laws and check whether the present regulations solve the issue of FinFluencers in India.

A. Definition of financial advice as per SEBI laws

Considering the current scenario in India, the primary regulatory body in charge of safeguarding client interests in the Indian stock market is the Stocks and Exchange Board of India (SEBI). SEBI published investment advisor rules in 2013 (I.A. Regulations).[12]  According to Regulation 2(1)(l)[13] of the SEBI (Investment Advisers) Regulations 2013, "investment advice" refers to written, oral, or other forms of communication that relate to trading in securities and guidance on investment portfolios that incorporate securities. The IA Regulations make it clear that they do not apply to the guidance given to the general public through newspapers, magazines, or other electronic, radio, or telecoms media. As a result, because FinFluencers give guidance to the general public via electronic methods, they are not subject to the I.A. Regulations.[14]

B. Research Analyst under SEBI (Research Analysts) Regulation, 2014

In order to prevent innocent and new investors from being deceived by dubious schemes, SEBI has extensive laws governing those providing investment advice. One such regulation is the SEBI (Research Analysts) Regulation, 2014, which defines a Research Analyst and regulates its functions. If we analyse these regulations, we can observe that present FinFluencers would come nearest to the definition of “Research Analyst” under Regulation 2(u) of the SEBI (Research Analysts) Regulation, 2014,[15] making them responsible for their content in accordance with the applicable laws.

According to the definition, a person qualifies as a Research Analyst if they write or publishes the research report's content, offers research report services, express an opinion regarding a public offer, or set the price targets.

Further, ‘Research Report’ has been defined under Regulation 2(w), which states that the term "Research Report" refers to any form of electronic communication while generally excluding opinions on general market trends or generalised opinions.[16]

The SEBI Regulations also include regulations for publishing reports in the public media, with the aforementioned regulations being literally and directly applicable. Electronic communication that is perceived through various social media platforms as having a wide audience reach may also be categorised similarly to an appearance before the public media, wherein there is a requirement for disclosure and assurance of reasonableness and fairness in the production of such reports, as per Regulation 21.[17]

C. Eligibility and Liabilities of a Research Analyst

The eligibility criteria for being a ‘Research Analyst’ includes the requirements such as a postgraduate degree, professional qualification, or five years of experience. Many of the "top FinFluencers" would fall short of these technical standards.

Further, there is also a requirement to pass the National Institute of Securities Market (NISM) tests. The NISM exam mandate makes sure that not just anyone with internet access can start posting comments online. This NISM serves as a safeguard for investors and satisfies SEBI's primary goal.

Further, being a ‘Research Analyst’ comes with certain liabilities and restrictions listed in the regulation. Regulations 16[18] and 18[19] prohibit people from dealing in equities once they are regarded as Research Analysts. The research report's contents need to be more precisely rated and time horizon benchmarked (i.e., the validity of such advice), as well as a disclaimer and publishers' persuasive liability to ensure accurate facts and information are included in their research in accordance with Regulation 20.[20] Research analysts are required by Regulation 24[21] to keep promotional actions at a distance from their work and to make sure that members who post such content abide by Regulation 7.[22] (with regard to technical qualifications). Regulation 25[23] forces them to keep a record of all their research and the justification for doing it, barring any escape through the deletion of such reports and also making these records available for examination. 

D. Finfluencer is not a Research Analyst as per the SEBI Regulation

Most FinFluencers operate outside of SEBI's supervision and appear to be violating its rules, occupying a grey area, or operating on a fine line. It is a significant question whether these FinFluencers come under the definition of a ‘Research Analyst’ and would the regulations of the SEBI (Research Analysts) Regulation, 2014, apply to them.

After analysing the statute, we can say that the financial advice from a FinFluencer will not fall under its purview since, according to Regulation 7(1)(iii), only a research analyst authorised by SEBI may submit a research report, which requires a postgraduate degree from the National Institute of Securities Markets (NISM). However, these FinFluencers do not have any such qualifications as the regulation requires. Therefore, we cannot classify these FinFluencers as ‘Research Analysts’.

 

Further, we cannot classify these FinFluencers as ‘Research Analysts’ because their information could be misinterpreted due to time variation gaps. For instance, the "top FinFluencers" (based on the number of followers they have on social media platforms) can be examined in light of these regulations. One can generally determine a pattern of content that they post, such as providing analysis on I.P.O.s, fundamental analysis of stocks, and recommending stocks for long- or short-term. However, a significant issue here is that until the end user watches the video, the information can be misinterpreted due to time variation gaps (for example, an Instagram reel being uploaded today and the end user considering it relevant when it reaches him/her, but the substantial time has elapsed for the user to act correctly) and information asymmetry, causing significant losses to the viewers.

 

As a result of the above reasons, we can conclude that neither Indian law nor regulations clearly define present FinFluencers and regulate the information they provide.

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VI. Regulations in Other Countries

In this section, the regulatory frameworks in the U.S.A.- S.E.C. (Securities and Exchange Commission), Germany- the Authority for Financial Markets (Autoriteit Financile Markten – A.F.M.), and the Netherlands- the Federal Financial Supervisory Authority (BaFin), which are SEBI's counterparts, have been examined in terms of their rules and developing legal frameworks, as well as administrative actions for FinFluencers.

A. United States of America

FinFluencers who promote or endorse securities on social media in the U.S.A. are subject to several regulatory requirements. The S.E.C. (Securities and Exchange Commission), the SEBI’s counterpart in the U.S., has issued S.E.C. guidance on Endorsements and Testimonials in Investment Advertising,[24] which mandates FinFluencers to disclose their relationship with the company and any compensation or incentives received in exchange for the endorsement. Further, the Financial Industry Regulatory Authority, under FINRA Rule 2210 (Communications with the Public),[25] requires that FinFluencers' communications about investments be fair, balanced, and not misleading. The Investment Advisers Act of 1940 also requires investment advisers, including FinFluencers, who provide investment advice, provide accurate and truthful information to their clients and disclose any conflicts of interest. Finally, the S.E.C. Rule 10b-5[26] prohibits insider trading, which prohibits FinFluencers from trading securities or making recommendations based on material, non-public information. FinFluencers who do not comply with the regulations governing the promotion or endorsement of securities face various potential consequences, including financial penalties and legal action.

B. Netherlands

The Dutch authority, A.F.M. (Autoriteit Financiële Markten), conducted an experimental study[27] to better understand the legal environment of FinFluencers. The name "FinFluencers" has been chosen to describe people who offer financial advice on social media platforms.

According to the study, FinFluencers does not act impartially or transparently, marketing risky products and prioritizing their own interests. The risk of non-compliance with Dutch regulations was also raised by A.F.M., which are similar to SEBI's rules in India in that they require influencers, FinFluencers, and third-party advertising to register with A.F.M. and obtain licenses.

FinFluencers cannot charge referral or advertisement fees due to Dutch law's limitation on third-party inducements.[28] Furthermore, it was said that if they actually offer these services, simply posting a disclaimer would not give them a pass from the rules. In 2021, A.F.M. sent notices to Grinta Invest and FinFluencers,[29] warning them against promoting hazardous instruments like C.F.D.s and foreign exchange while operating without the necessary licenses.

C. Germany

The German regulatory body "BaFin" also mandates that FinFluencers[30] adhere to the "Unfair Competition Act"[31] when marketing products in accordance with the provisions of competition law, as well as the "Market Abuse Regulation"[32] and any delegated regulations on the Market Abuse Regulations[33] that have specific requirements for those who recommend investments or investment strategies and pose as financial experts. In accordance with the German Securities Trading Act[34], breaking these rules may result in fines and other penalties. The financial firms that control FinFluencers may also be held accountable for unfair practices in relation to these requirements.

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VII. Recent Development and Evolving Jurisprudence

The SEBI has realized the importance of regulating financial influencers and FinFluencers and giving unsolicited financial advice on social media platforms. Recently, the SEBI whole time member (W.T.M.), Mr. S K Mohanty, said that work for the guidelines for a financial influencer is under process and SEBI would soon come with the regulation for the same.[35]

The SEBI has noted the adverse effects of social media on stock markets, price discovery, and the losses of new investors who were deceived by "tips" or suggestions. Recently, Telegram groups, which were the leading direct cause of these elements, have come under pressure. In Re: Stock Recommendations Using Social Media Channel (Telegram) (SEBI), it was determined that the individuals in charge of the channel had unfairly charged fees despite not being registered as research analysts or investment advisors. However, for a brief period, the number of members and the number of tips and suggestions did have an effect because there was a surge in trading of a particular stock that also included under laws against unfair trade practises.[36] Intriguingly, in the Telegram case, SEBI noticed how a large subscriber base could result in the manipulation of stock prices and has been actively taking action (such as banning Telegram channels and giving offenders show-cause notices, etc.) to stop practises that promote unethical and unhealthy business practises. In contrast, the U.S. markets have recently seen numerous manipulations of this nature that the Securities Exchange Commission (S.E.C.) was unable to stop, such as in the case of Reddit's WallStreetBets' pump and dump[37] of specific scrips, which is a commendable comparison to SEBI's successful management in maintaining its goal of protecting Indian investors.

 

On 10 March, SEBI launched a reprisal against market players for allegedly manipulating stocks using social media. It conducted searches at the residences of at least seven people and one business spread out over numerous locations in Ahmedabad and Bhavnagar in Gujarat, Neemuch in Madhya Pradesh, New Delhi, and Mumbai. According to SEBI, the perpetrators were buying shares in small-cap businesses in large quantities and then imitating research analysts and disseminating comments via social media, implying great chances of a rise in the share price to encourage individuals to buy the stocks.[38]

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VIII. Critical Recommendations

After examining the current laws in India regarding financial influencers, it can be derived as a conclusion that India lacks a regulatory mechanism for financial influencers and the advice propagated by them. A few critical recommendations have been derived through in-depth research on certain international jurisdictions. The following critical recommendations should be considered in any regulation for FinFluencers in India:

A. An unambiguous and precise definition of Financial Advice

As discussed above, the current statutes and regulations have failed to define financial advice clearly. Without a clear definition of this term, we cannot regulate FinFluencers. Several countries have clearly defined "financial advice" in their rules for FinFluencers. Australia has created a criterion for FinFluencers via Information Sheet 269, which explicitly defines and regulates financial product advice.[39] Additionally, the European Securities and Markets Authority has defined "investment recommendations" along similar lines.[40] Accordingly, SEBI should precisely define what constitutes "financial advice" in its rules.

B. Mandatory Disclosure in Advertisements

The financial influencer marketing sector is booming, and as a result, many financial organizations are approaching FinFluencers to advertise their financial goods and services. These FinFluencers promote products without disclosing their relationship with them or the payment they receive. Often, these businesses, financial services, and the products they offer become frauds, causing severe financial harm to the customers who use those services on these FinFluencers' advice. Furthermore, these influencers can easily avoid such situations and bear no responsibility for their decisions. Thus, disclosing the advertisement deals would create a transparent environment where the consumer can make a well-informed choice.

C. Drawing inspiration from International Bodies

The SEBI should take cues from international organizations in terms of doing research and determining the impact of these FinFluencers on Indian markets and stakeholders in light of the global regulatory framework. The existing SEBI laws are a practical and well-thought-out example of the rule of law. Still, it is essential to critically evaluate how they are being implemented in the context of the quickly expanding social media. To a large part, SEBI has been effective in implementing improvements with regard to Telegram tips and trades. Still, caution must be exercised due to these FinFluencers and their rising popularity.

D. Quality checks over FinFluencers

Additionally, adequate quality controls for FinFluencers have been implemented in nations like Australia and China. According to Section 911A of the Corporations Act 2001, influencers in Australia are required to hold an Australian financial services (A.F.S.) license before they may offer financial product advice. Similarly, through Article 13 of the Code of Conduct for Internet Hosts, dated 22 June 2022, China has established that influencers are only permitted to live stream or publish their opinions online under certain conditions and for content related to finance that demands a higher level of professionalism. Likewise, India should introduce regulations that have effective quality checks over the FinFluencers, before their content is published anywhere.

E. Monitoring and learning from cryptocurrency markets

Although the digital currency has not been within SEBI's purview, the dark domain of FinFluencers can be quantified. For instance, Vauld's Crypto-FD, a product with a high level of risk that recently stopped all withdrawal activities,[41] was promoted by almost all well-known Indian social media influencers for about Rs. 5 lakhs. A closer examination of the product's operation would have revealed serious flaws, especially in the volatile cryptocurrency markets.

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IX. Conclusive Analysis

FinFluencers are a significant problem that affects first-time investors, who can lose faith in the market after facing recurring losses pursuant to the inept advice of the FinFluencers. Most importantly, the Indian FinFluencers must be regulated since they can influence the trends and investment choices of sizable internet customers, making monitoring imperative. A quality control system for FinFluencers is essential since it will help ensure that only those with the necessary training and credentials may give financial advice.

 

It can be concluded that it is important to develop a quality check on FinFluencers that assures that those who have the necessary training and credentials in the financial industry are allowed to offer financial advice. Rules controlling FinFluencers should adopt a balanced approach because they are crucial to raising the nation's level of financial literacy. While guidelines will be a good first step in preventing those who lack the necessary financial knowledge from creating financial advice content, stringent regulations that apply to all FinFluencers would rob people of a source of information on personal finances and thereby limiting the expansion of the public's participation in investing in publicly traded companies. It is crucial that the slaws consider this delicate line, offer a precise definition of "financial influencers," make the restrictions robust enough to deter "fakes," and encourage "genuine" individuals to share the benefits of long-term investing in Indian markets that can lead to wealth.

 

 

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[1] Tejashree, SEBI will publish regulations for “finfluencers”; what are the procedures?, Inventiva (Mar. 27, 2023, 3:50 PM), https://www.inventiva.co.in/trends/sebi-publish-regulations-finfluencers.

[2] (2019) Financial Literacy and Inclusion in India. rep. National Centre for Financial Education (NCFE).

[3] SEBI Act,1992, §12A.

[4] SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) (Amendment) Regulations, 2022.

[5] Sundstrand Corp. v. Sun Chemical Corp., (1977) 553 F.2d 1033.

[6] SEBI Interim Order cum Show Cause Notice, WTM/SKM/54/201-22.

[7] (2021) Staff Report on Equity and Options Market Structure Conditions in Early 2021. rep. Securities and Exchange Commission, USA.

[8] supra note 10.

 

[9] Samie Modak, At 6.1 mn, pace of demat account additions slowest in 10 quarters in Q2FY23, Business Standard (Mar. 27, 2023, 4:35 PM), https://www.business-standard.com/article/markets/at-6-1-mn-pace-of-demat-account-additions-slowest-in-10-quarters-in-q2fy23-122100600762_1.html

[10] Sebi may roll out guidelines for financial influencers: Report, Market Today (Mar. 27, 2023, 2:30 PM), https://www.businesstoday.in/markets/story/sebi-may-roll-out-guidelines-for-financial-influencers-report-353242-2022-11-17 

[11] It’s time that social media influencers on finance are brought under regulation, The Hindu Business Line (Mar. 27, 2023, 4:20 PM), https://www.thehindubusinessline.com/opinion/editorial/its-time-that-social-media-influencers-on-finance-are-brought-under-regulation/article66174675.ece

[12] SEBI (Investment Advisers) Regulations, 2013.

[13] SEBI (Investment Advisers) Regulations, 2013, § 2(1)(1).

[14] Souvik Ganguly, Finfluencers to be regulated soon!, Lexology (Mar. 27, 2023, 4:40 PM), https://www.lexology.com/library/detail.aspx?g=d89d1170-f750-404e-ad86-f8258d94a2a4

[15] SEBI (Research Analysts) Regulation, 2014, § 2(u).

[16] SEBI (Research Analysts) Regulation, 2014, § 2(w).

[17] SEBI (Research Analysts) Regulation, 2014, § 21.

[18] SEBI (Research Analysts) Regulation, 2014, § 16.

[19] SEBI (Research Analysts) Regulation, 2014, § 18.

[20] SEBI (Research Analysts) Regulation, 2014, § 20.

[21] SEBI (Research Analysts) Regulation, 2014, § 24.

[22] SEBI (Research Analysts) Regulation, 2014, § 7.

[23] SEBI (Research Analysts) Regulation, 2014, §25.

[24] SEC (Guidance on Endorsements and Testimonials in Investment Advertising), § 17 CFR Part 275.

[25] Financial Industry Regulatory Authority (FINRA) Rule, 2210.

[26] SEC Rule, 10b-5.

[27] (2021) The pitfalls of ‘finfluencing.’ rep. AFM.

[28] Inducements under pressure. rep. FECIF MiFID II & IDD Survey.

[29] AFM warns consumers about Grinta Invest, AFM (Mar. 27, 2023, 5:40 PM), https://www.afm.nl/en/nieuws/2021/november/waarschuwing-grinta

[30] Investment tips on social media: caution is paramount, Federal Financial
Supervisory Authority, (Mar. 27, 2023, 5:50 PM), https://www.bafin.de/EN/Verbraucher/Aktuelles/verbraucher_soziale_medien_en.html

[31] Act Against Unfair Competition (Gesetz gegen den unlauteren Wettbewerb – UWG), 2016.

[32] Market Abuse Regulation (MAR), Regulation (EU) No 596/2014.

[33] Implementing and delegated acts – MAR, Regulation (EU) No 596/2014.

[34] The German Securities Trading Act (Wertpapierhandelsgesetz), 1998.

[35] Palak Shah, Tightening the noose. Social media ‘fin-fluencers’ on SEBI’s radar, The Hindu Businessline ( Nov. 17, 2022, 09:35 PM),

https://www.thehindubusinessline.com/markets/social-media-fin-fluencers-on-sebis-radar/article66149521.ece

[36] In Re Stock Recommendations using Social Media Channel (Telegram) (SEBI), WTM/SKM/54/201-22.

[37] Shalini Nagarajan, The SEC is hunting down possible misinformation on social media posts for signs of fraud in Reddit-driven trading frenzy, report says, Markets Insider (Mar. 27, 2023, 6:40 PM), https://markets.businessinsider.com/news/stocks/sec-hunting-fraud-misinformation-social-media-reddit-driven-trading-frenzy-2021-2-1030042965  

[38] Maya M, SEBI To Regulate Financial Influencers on Social Media Platforms, Money Life (Mar. 27, 2023, 6:50 PM), https://www.moneylife.in/article/sebi-to-regulate-financial-influencers-on-social-media-platforms/68927.html.

[39] Australian Securities & Investment Commission (Discussing financial products and services online), Information Sheet 269 (INFO 269).

[40] European Securities and Markets Authority (ESMA’s Statement on Investment Recommendations on Social Media), ESMA70-154-2780.

[41] Crypto-trading platform Vauld suspends operations, The Economic Times (Mar. 27, 2023, 7:50 PM), https://economictimes.indiatimes.com/tech/technology/crypto-trading-platform-vauld-suspends-operations/articleshow/92648573.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst