Sebi Targets Social Media Misinformation: New Rules to Make Every Regulated Post Traceable

The Securities and Exchange Board of India (Sebi) has unveiled a proposal aimed squarely at cleaning up the financial chatter dominating social media. The regulator wants every Sebi-registered firm—from mutual funds and brokers to advisors and distributors—to clearly display their name and registration number not just on their profile page, but on every single post they publish online.

The move, outlined in a consultation paper released Friday, stems from a growing need to clearly differentiate between content issued by regulated entities and the overwhelming volume of posts generated by unregulated players. With millions of retail investors consuming financial advice through short videos, reels, and influencer-driven posts, Sebi is attempting to introduce traceability and accountability into an ecosystem that has long operated in the grey.

However, experts say the proposal only solves part of the problem. Vishal Bedse of ICICI Investment Management notes that while the rules will make it easier to identify legitimate sources, the real threat comes from the unregulated crowd—“fraudsters and imposters”—who face no such obligations. This shifts the responsibility back onto viewers to verify authenticity before acting on the content they consume.

Sebi’s consultation paper highlights the rising risks: unregistered individuals using manipulative or misleading posts to lure investors, often presenting themselves as market experts. To counter this, the regulator wants strict boundaries for those within its fold. Registered entities would be prohibited from making exaggerated claims, exploiting investor inexperience, promising risk-free or guaranteed returns, or referencing past performance unless explicitly allowed. They are also barred from using Sebi’s logo or implying any endorsement from the regulator.

The watchdog has already been active on the enforcement front. Sebi chairman Tuhin Kanta Pandey revealed that the regulator has flagged over one lakh instances of unlawful or harmful content to major platforms including Google, Meta, Telegram, and X. He added that regulated firms can no longer collaborate with unregistered influencers—a major route through which misleading claims have historically spread.

A recent Sebi-commissioned survey underscores why the regulator is tightening its grip. Conducted across more than 90,000 households, the study found that 62% of retail investors now rely primarily on finfluencers when making investment decisions. Even more striking, 93% of these followers consider such influencers “moderately to highly credible”—a level of trust that often surpasses traditional advisors.

While the proposed framework makes it easier to identify regulated content, Sebi has not yet specified a deadline for public feedback. For now, the regulator appears focused on pushing the industry toward greater transparency—one disclosure, one post, and one registration number at a time.