CHANDIGARH: To protect investors from finfluencers operating outside of Sebi regulations, offering stock tips and at times even operating in cahoots with unscrupulous promoters for ‘pump & dump’ schemes, the markets regulator is removing 6,000-7,000 such social media posts each month.Sebi is also working to educate people-investors and would-be investors-so that they can avoid frauds and heartbreaks about their investments, the regulatory body’s chief Tuhin Kanta Pandey told TOI.Pandey was speaking at Panjab University here, his alma mater, where he launched Project Jagrook that aims to promote investor education, encourage informed investment practices and help prevent financial fraud. The project is a nationwide investor awareness campaign launched by Sebi, together with AMFI, NISM and a host of market infrastructure institutions: NSE, BSE, MCX, CDSL and NSDL.
Pandey said that there were broadly three types of finfluencers: those who are registered and go by Sebi’s regulations, those who do not adhere to Sebi’s regulations and in the garb of investor education push trading and investment tips, and those unscrupulous finfluencers who work with promoters to defraud gullible investors.“There are those influencers who genuinely want to provide financial education. There is nothing wrong with that. Everyone has the fundamental right to express an opinion and educate people through their channels,” the Sebi chief said.“The problem arises when they cross the line defined by our regulations. If someone provides specific investment advice, such as a particular stock tip or a specific investment strategy, without having the required licence or regulatory registration, they are operating irresponsibly. This can pose a significant risk of losses to investors. Sebi considers such conduct improper and the regulatory body is entitled to take action against those involved,” he said.“One form of action is removing such content from cyberspace to prevent further activity. We remove around 6,000 to 7,000 pieces of such content every month, often with the help of AI tools,” Pandey said.“If the person is part of a larger network or coordinated scheme, such as a ‘pump & dump’ operation involving company promoters, the action goes beyond content removal. We can order disgorgement of illegally earned profits and bar such persons from participating in the securities market. However, these actions are based strictly on evidence and investigation,” the Sebi chief explained. About investing and his advice to the young investors, Pandey said that investing is simple, provided one understands it. “Understanding is the crucial first step. Once you understand the concepts, things become simpler. Jumping into something without understanding it is not the right approach. That is precisely the message we want to convey,” Pandey said.A day earlier, the Sebi chief had said that the regulatory body had received about 1.4 lakh responses to seven proposals in the consultation paper on the closing auction session (CAS) that it had published last month, and Oct 3 was the last day for responses.The regulatory body was studying those proposals and would soon come up with new or changed rules for CAS and pricing of derivatives products, he said.
