COURTKUTCHEHRY SPECIAL REPORT ON FIN INFLUENCER’s RULES
SEBI Crackdown on Finfluencers: Laws Every Market Influencer Must Know, From India to Global Rules
Recovery of ₹18.14 crore from ‘Baap of Chart’ highlights risks of unregistered investment advice.
From SEBI to SEC, regulators worldwide tighten rules on financial influencers to protect investors.
By Our Legal Reporter
New Delhi: December 19, 2025:
The Securities and Exchange Board of India (SEBI) has intensified its crackdown on financial influencers, popularly known as finfluencers. The latest case involves Mohammad Nasiruddin Ansari, widely known as Baap of Chart, from whom SEBI has initiated recovery of ₹18.14 crore for running unregistered investment advisory services.
This case has sparked debate on the responsibilities of financial influencers and the laws they must follow. With millions of retail investors relying on social media for stock tips, regulators in India and abroad are tightening rules to ensure transparency and investor protection.
Background: The Baap of Chart Case
Ansari, along with associates, allegedly offered buy/sell recommendations, trading calls, and portfolio advice through social media platforms under the guise of “educational training.” SEBI found that these activities amounted to investment advisory services, which require mandatory registration under the SEBI Investment Advisers Regulations, 2013.
- SEBI froze bank accounts, demat holdings, and mutual fund investments of the accused.
- The regulator prohibited disposal of movable and immovable properties.
- Earlier, SEBI had directed refund of ₹17.2 crore collected from investors.
The case highlights how finfluencers can build massive followings outside the regulated system, posing risks to retail investors.
Indian Laws Finfluencers Must Know
- SEBI Investment Advisers Regulations, 2013
- Mandatory registration for anyone offering investment advice.
- Covers stock tips, portfolio management, and trading calls.
- Violations can lead to penalties, refunds, and market bans.
- SEBI Research Analyst Regulations, 2014
- Applies to individuals publishing research reports or recommendations.
- Requires disclosure of conflicts of interest.
- SEBI Act, 1992 – Section 12
- No person can act as an investment adviser without registration.
- Penalty Provisions
- Monetary penalties, freezing of assets, and imprisonment in severe cases.
Global Rules for Financial Influencers
- United States (SEC & FINRA)
- Influencers offering investment advice must register as investment advisers.
- SEC has acted against unlicensed promoters of crypto and stocks.
- Disclosure of paid promotions is mandatory.
- United Kingdom (FCA)
- Strict rules on “financial promotions.”
- Influencers must ensure advice is fair, clear, and not misleading.
- Australia (ASIC)
- Social media influencers giving financial advice must hold an Australian Financial Services (AFS) license.
- Heavy penalties for misleading or unlicensed advice.
- European Union (MiFID II)
- Requires transparency in investment recommendations.
- Influencers must disclose conflicts of interest.
These global frameworks show a common trend: financial advice without registration is illegal.
Risks of Unregistered Advice
Unregistered finfluencers pose several risks:
- Investor losses: Retail investors may follow unverified tips and suffer financial harm.
- Market manipulation: Influencers can create artificial hype around stocks.
- Lack of accountability: Without regulation, investors have no recourse for losses.
- Legal consequences: Influencers face asset freezes, penalties, and bans.
Expert Opinions
- Market analysts say SEBI’s crackdown is necessary to protect retail investors.
- Legal experts emphasize that finfluencers must register and disclose conflicts of interest.
- Academics note that social media has blurred the line between education and advice, requiring stricter oversight.
Lessons for Finfluencers
The Baap of Chart case offers important lessons:
- Get registered: Apply for SEBI registration before offering advice.
- Disclose promotions: Clearly state if content is sponsored.
- Avoid misleading claims: Do not guarantee profits or returns.
- Maintain transparency: Share risks along with recommendations.
- Follow global best practices: Learn from SEC, FCA, and ASIC rules.
Conclusion
The SEBI crackdown on Baap of Chart is a wake-up call for India’s growing community of financial influencers. While social media offers powerful tools to educate investors, unregistered advice is illegal and dangerous.
Globally, regulators are converging on stricter rules to ensure that influencers act responsibly. For finfluencers, the message is clear: register, disclose, and comply—or face penalties and bans.
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