Financial influencers providing advice on stock markets, investments, or creating any kind of promotional content or commentary related to banking and financial services (BFSI), must now be registered with the Securities Exchange Board of India (SEBI), according to the recent guidelines provided by the Advertising Standards Councial of India (ASCI). In addition, influencers providing other financial advice must have qualifications as that of a Chartered Accountant or a Company Secretary and must possess a license from Insurance Regulatory and Development Authority (IRDAI).
ASCI’s recent guidelines primarily focus on financial influencers or ‘finfluencers’ and those providing information on health and nutrition related subjects. According to the organisation’s statement, these rules are an addition to the initial guidelines for advertising by influencers issued in May 2021. The original guidelines outlined criteria and rules for disclosures required to be made by all kinds of influencers engaging in advertising products. However, back then the ASCI had not dealt with sector-specific obligations or the differences in the impact of the types of products being advertised, for example, the impact of a bad advice pertaining to financial matters on a user’s decision-making process.
“As losses to consumers could be substantial and serious due to improper or wrong advice in the categories connected with a) Banking, Financial Services and Insurance (BFSI) and b) Health and nutrition products & services it is necessary that Influencers in these two categories are qualified to provide advice and that these qualifications are stated upfront in their posts,” ASCI noted in its latest press release, reviewed by MediaNama.
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Why it matters:
Content created by financial influencers have come under scrutiny by SEBI for disseminating unchecked information on critical matters like investments, which pose risks of hurting financial security of viewers. In May this year, SEBI had taken action against trader and finfluencer PR Sundar, Mangayarkarasi Sundar for providing investment advice without obtaining mandatory registrations from the regulator. The influencers were followed by a large number of followers on YouTube, Twitter and Telegram. Additionally, in March, SEBI had also issued orders against YouTube channels that were allegedly involved in creating misleading videos with false, paid content worth crores of rupees to lure investors and manipulate share prices. Taking note of these issues and risks of user-harm involved in allowing such content to flow freely on social media, ASCI’s guidelines aim to provide clarity on the ways in which finfluencers can include necessary disclosures in their content.
What do the additional guidelines say?
- Influencers providing BFSI and investment advice need to be registered with SEBI and are required to state their SEBI registration number along with name and other qualifications upfront on their posts.
- In addition to having suitable qualifications mentioned above, financial influencers need to abide by all disclosure requirements mandated by regulators of the financial sector.
- Health, fitness, and nutrition influencers must be qualified a certified medical practitioner or nurse, nutritionist, dietician etc depending on the advice they choose to give through their content.
Rules for incorporating disclosures prominently:
- The ASCI recommends the prominent disclosure of qualifications, registration number and other certification details of a financial or a health influencer. These details defining their credibility as a subject expert need to be “superimposed” on the visuals upfront. They can also be mentioned in the opening remarks of the video content.
- For blogs or text-based posts, such details must be included in the beginning before the consumer starts reading the post.
- For podcasts or only audio content, influencers must mention the qualification/certification details before they begin their advertising content.
- It is important to note that influencers will have to be able to provide proof of their qualifications when asked by ASCI.
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