SEBI has floated a consultation paper that seeks to restrict the association of SEBI registered intermediaries with unregistered finfluencers.

Such unregistered entities and finfluencers may be enticing their followers to purchase products, services, or securities in return for undisclosed compensation from platforms or producers, SEBI said. This could be in the form of referral fee, non-cash benefits, direct compensation from the social media and/or profit sharing with the underlying product or platform.

SEBI registered intermediaries will now have to take active measures to dissociate themselves from any unregistered entity using their name, product or service.

Finfluencers registered with SEBI, stock exchanges or AMFI will display their registration number, contact details, investor grievance redressal helpline and make appropriate disclosure and disclaimer on any posts. They shall adhere to the relevant code of conduct and advertisement guidelines issued by the regulator.

SEBI-regulated entities will not share any confidential information of their clients with unregistered entities.