India Needs Stronger Finfluencer Enforcement—and Global Regulators Need Greater Cooperation

Posted In: Capital Markets, Disclosure, Fintech, Investor protections, Standards, Ethics and Regulations (SER), Survey

Why Does India Need Stronger Oversight of Finfluencers?

India’s growing retail investor market faces a serious challenge: social media influencers who offer investment recommendations without proper registration, adequate disclosures, or regulatory oversight. Recent research from CFA Institute highlights the scale of the problem: One-third (33.3%) of the Indian finfluencers studied made explicit stock recommendations, yet only 6.3% were registered with the Securities and Exchange Board of India (SEBI), India’s capital markets regulator. More than one-third failed to adequately disclose sponsorships or conflicts of interest.

SEBI has tightened oversight of finfluencers since 2024, restricting partnerships between regulated financial firms and individuals offering unauthorized investment advice. It has also clarified the distinction between financial education and regulated advice and taken enforcement action against unregistered advisers. But regulation must keep pace with the rapid growth of financial content on social media. CFA Institute supports clearer boundaries between financial education and investment advice, stronger disclosure requirements, more effective monitoring, and greater cooperation among regulators and digital platforms.

Building on an earlier blog post, “India’s Finfluencer Challenge: From Influence to Accountability,” we examine SEBI’s regulatory response and consider what India can learn from approaches adopted in other jurisdictions.

India’s Existing Finfluencer Rules and SEBI’s Response So Far

SEBI regulates finfluencers according to what they do rather than by how they describe themselves. Its approach covers individuals who use social media to provide financial information, advice, or recommendations that may influence investment decisions. Although SEBI has not established a separate legal category for finfluencers, it has made clear that existing securities regulations apply to investment-related activity on social media.

SEBI has increased its scrutiny of financial content on social media and taken enforcement action against individuals providing investment advice without authorization. However, the volume of online content, the speed at which it spreads, and the ways influencers earn money continue to challenge effective oversight.

The challenge is not simply to establish rules but to ensure that regulators can identify potentially unlawful advice, monitor compliance, and take timely enforcement action.

Lessons from Other Regulators Around the World

Regulators worldwide are tightening oversight of financial influencers as social media becomes an increasingly important source of investment information. Their approaches differ, but several common priorities have emerged: clear rules governing financial promotions, transparent disclosure of commercial relationships, effective supervision, and enforcement against unauthorized investment advice. These developments offer lessons for India as SEBI strengthens investor protection.

The market regulator in the United Kingdom, the Financial Conduct Authority(FCA), finalized its guidance on financial promotions on social media in 2024.[1] This guidance stipulates that the onus of compliance rests completely on finfluencers, who should consider whether they are the right person to promote a product or service. In 2025, apart from issuing cease-and-desist alerts, FCA also took serious steps in a crackdown on illegal finfluencers, including arrests and authorizing criminal proceedings.[2]

In the United States, Section 17(b) of the Securities Act, popularly known as the Anti-Touting Rule,[3] is one of the most important provisions of SEC rules for financial influencers. Under this rule, it is illegal for finfluencers to promote a security without disclosing compensation. This rule addresses paid advertising disguised as “opinions”.[4] In December 2025, the SEC filed charges for defrauding retail investors against three crypto asset trading platforms and four investment clubs on social media.[5]

In 2022, the Australian Securities and Investments Commission (ASIC) issued guidance to address misrepresentation by finfluencers. Information Sheet 269 (INFO 269), “Discussing Financial Products and Services Online,” directly addresses social media influencers as well as Australian financial services licensees that use influencers.[6] INFO 269 sets out how financial services laws apply to them and that it is an influencer’s responsibility to ensure that any content complies with the law. Licensees may also be liable for misconduct by influencers that they use.

In June 2023, France introduced a dedicated legal framework governing commercial influence, known as the “Influencers Act”.[7] The Act established a specific legal regime governing commercial influence activities. The two major objectives were to enhance transparency in promotional content and to provide legal certainty for contractual relationships between the various stakeholders in influencer marketing.[8]

Cross-Border Cooperation Is Becoming Essential

In June 2025, nine financial regulators from Australia, Canada, Hong Kong SAR, Italy, the United Arab Emirates, and the United Kingdom joined an FCA-led initiative to combat unlawful financial promotions by finfluencers. Their coordinated actions included arrests, regulatory warnings, and requests to remove unauthorized financial content from social media platforms.[9]

For India, the lesson is clear: Domestic enforcement and increased surveillance must be supported by international cooperation, particularly when influencers operate overseas or distribute investment content through non-domestic platforms.

How Should Regulators Strengthen Finfluencer Oversight?

The rapid growth of financial influencers presents regulators with a challenge that national securities rules alone cannot fully address. Investment recommendations made online can reach millions of investors across borders, often without clear disclosures or adequate regulatory oversight.

SEBI and other regulators should focus on three priorities: clearer guidance distinguishing financial education from regulated investment advice; stronger monitoring and enforcement of existing requirements; and closer cooperation with social media platforms, regulated financial firms, and overseas authorities.

Cross-border coordination is particularly important. Influencers may operate outside the countries where their audiences live, making it difficult for domestic regulators to investigate misconduct or enforce investor protection rules.

Effective oversight must therefore extend beyond individual regulators. It requires coordinated action across jurisdictions and greater accountability throughout the digital financial information ecosystem. The goal should be not to restrict access to useful financial information but rather to ensure that investors can distinguish credible education from regulated advice, recognize commercial conflicts, and make informed investment decisions.

[1] FCA, “Finalised Guidance on Financial Promotions on Social Media” (March 2024). www.fca.org.uk/publication/finalised-guidance/fg24-1.pdf.

[2] FCA, “FCA Leads International Crackdown on Illegal Finfluencers,” press release (6 June 2025). www.fca.org.uk/news/press-releases/fca-leads-international-crackdown-illegal-finfluencers; Primas Law, “FCA Guidance on Social Media Financial Promotions,” blog post (9 April 2024). www.primaslaw.co.uk/news/fca-guidance-on-social-media-financial-promotions.

[3] US SEC, “Securities Act of 1933” (as amended through P.L. 119-27, enacted 18 July 2025). https://www.govinfo.gov/content/pkg/COMPS-1884/pdf/COMPS-1884.pdf.

[4] US SEC, “SEC Statement Urging Caution Around Celebrity Backed ICOs,” statement from SEC Division of Enforcement and SEC Office of Compliance Inspections and Examinations (1 November 2017). www.sec.gov/newsroom/speeches-statements/statement-potentially-unlawful-promotion-icos-sec-statement-urging-caution-around-celebrity-backed-icos.

[5] US SEC, “SEC Charges Three Purported Crypto Asset Trading Platforms and Four Investment Clubs with Scheme That Targeted Retail Investors on Social Media,” press release (22 December 2025). www.sec.gov/newsroom/press-releases/2025-144-sec-charges-three-purported-crypto-asset-trading-platforms-four-investment-clubs-scheme-targeted.

[6] ASIC, “Discussing Financial Products and Services Online,” Information Sheet 269 (March 2022). www.asic.gov.au/regulatory-resources/financial-services/giving-financial-product-advice/discussing-financial-products-and-services-online/.

[7] French Republic, “Article 8 of Law No. 2023-451 of 9 June 2023 Regulating Commercial Influence and Combating Abuses by Influencers on Social Media,” Journal officiel de la République française (10 June 2023). www.legifrance.gouv.fr/loda/id/LEGISCTA000047665803.

[8] Government of France, “LOI n° 2023-451 du 9 Juin 2023 Visant à Encadrer L’Influence Commerciale et à Lutter Contre les Dérives des Influenceurs sur les Réseaux Sociaux” (9 June 2023). www.legifrance.gouv.fr/jorf/id/JORFTEXT000047663185.

[9] UK Financial Conduct Authority (FCA), “FCA Leads International Crackdown on Illegal Finfluencers,” press release (6 June 2025). www.fca.org.uk/news/press-releases/fca-leads-international-crackdown-illegal-finfluencers

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About the Author(s)

Gaurav Kapur, CFA

Gaurav Kapur, CFA, is Senior Director of Government Relations & Advocacy, India, at CFA Institute India Private Limited. With more than 20 years of experience in finance and public policy, he works with regulators, government agencies, industry associations, financial institutions, and academic organizations to promote evidence-based policies that support the development of India's capital markets. Previously, he served as Head of Policy, India, at ACCA, leading thought leadership and knowledge-based policy initiatives. His career spans fund management, equity research, corporate strategy, commercial planning, and treasury operations at organizations including BOI AXA Investment Managers, Birla Sun Life Asset Management, Aditya Birla Nuvo, Hindustan Unilever, and Hindalco. Kapur is a CFA charterholder and qualified chartered accountant. He earned an MBA from the Indian Institute of Foreign Trade (IIFT), where he received the Ratan Tata Scholarship for academic excellence.

Pankaj Sharma

Pankaj Sharma leads capital markets policy for CFA Institute in India. In his role, he is responsible for advocating policy positions on issues that affect Indian capital markets and stakeholders across a broad spectrum including corporate governance parameters, sustainability topics, use of technology and retail participation in capital markets, impact of demographic influences, and other relevant local factors for markets. He has more than 20 years of experience in financial services. Before joining CFA Institute, Sharma was an award-winning and globally rated equity analyst covering a diverse set of sectors in India and international markets for many global investment banks. He is also a published author on topics at the intersection of economy, society, and technology with globally recognized brands including Bloomsbury and Routledge/Taylor & Francis.