Regulating Finfluencers In India: Bridging Legal Gaps In Retail Investor Protection
Sampurna Banerjee, Amity University, Kolkata
ABSTRACT
Financial influencers, or "finfluencers," have emerged as potent social personalities offering investment advice, gaining immense popularity in the Indian market, particularly among young retail investors. Retail investors - individuals trading securities for personal accounts rather than organizations - play a pivotal role in market dynamics. While finfluencers have increased financial awareness and capital flow, unregulated activities pose significant threats to the economy and investors through misleading tips, hidden promotions, and market manipulation. Current Indian law utilizes general tools such as SEBI’s fraud provisions, CPA endorsement rules, and ASCI guidelines, yet no specific framework fully covers finfluencers. SEBI’s recent initiatives, including the 2023 Consultation Paper and mandatory disclosures, address some issues, but gaps remain and most notably the ‘public media’ exclusion in the definition of investment advice. This paper examines the current regulatory landscape, identifies existing inadequacies, and recommends a functional, technologically driven regulatory model for the post-pandemic era. It advocates for the formal recognition of finfluencers as a regulatory category, enhanced disclosure norms, and platform-level accountability to ensure a sound and efficient financial ecosystem.
Keywords: Finfluencers; Investment Law; Retail Investors; Securities and Exchange Board of India; Financial Regulation; Social Media Governance.
