In a significant move to regulate financial influencers, the Securities and Exchange Board of India (SEBI) has imposed strict restrictions on the use of live stock market data in educational content. The new directive, issued in a circular on 29 January 2025, mandates that stock market educators can only use stock prices with a three-month delay, effectively curbing the practice of offering real-time trading advice disguised as education.
According to the SEBI circular, individuals engaged in stock market education must refrain from displaying or discussing stock prices from the past three months. This includes mentioning security names, using code names, or displaying real-time price data in any form that could imply investment recommendations. “A person engaged solely in education shall mean that such person is not engaged in any of the two prohibited activities,” the circular stated, reinforcing that unregistered individuals cannot provide market advice under the pretext of education.
A blow to finfluencers
This regulatory update is expected to disrupt the business model of many social media-based financial influencers, or “finfluencers,” who rely on live market speculation to attract and retain their audience. SEBI has been tightening its grip on unregistered advisory services, with an earlier circular in October 2024 prohibiting registered entities from associating with unregistered financial influencers. The latest move closes another loophole by ensuring that even under the guise of education, unauthorised individuals cannot provide trading guidance.
Key provisions in the SEBI circular:
- No unverified investment advice
Only registered professionals can give stock market advice; others cannot.
- No fake promises
No one can claim guaranteed profits or returns unless SEBI allows it.
- Who you work with matters
Stockbrokers, exchanges, and financial firms can’t associate with those breaking these rules.
- Companies are responsible
If a financial company works with someone making false claims, they will also be held accountable.
- Education is fine, but no hidden advice
Teaching about the stock market is okay, but sneaking in tips or predictions isn’t.
- Marketing needs to be clean
Entities registered with SEBI are barred from associating themselves with any finfluencer, whether it’s through a financial partnership or promotional collaboration.
- No secret deals
No exchanging money, referrals, or customer data with rule-breakers.
- Strict consequences
Those violating the new rules will be subjected to penalties, suspension or even cancellation of their SEBI registration.
- New rules are active
These rules have been in effect since August 29, 2024, and firms had until January 2025 to comply.
- Online ads can be risky
If a company doesn’t control where its digital ads appear, they could unknowingly break the rules.
SEBI’s concern over misleading investment advice
The rise of finfluencers on platforms like YouTube, Instagram, and Telegram has blurred the lines between financial education and investment advisory services. Many influencers, while claiming to provide educational content, have been accused of manipulating their audience by offering stock tips in exchange for payments or subscriptions. SEBI’s latest crackdown aims to eliminate unregulated investment advice that could mislead retail investors.
Impact on the finfluencer industry
With these new restrictions, several finfluencers may struggle to maintain their subscriber base, as the appeal of real-time market analysis will no longer be available to them. The move also forces unregistered financial educators to either seek SEBI certification or drastically alter their content strategy.
While investor education remains permitted, SEBI’s directive makes it clear that stock market education must not cross over into financial advisory without proper regulatory oversight. The regulator has warned that anyone found violating these rules—whether individuals, influencers, or registered entities—will face strict enforcement actions.