Sebi proposes brokers stay away from unregulated financial influencers

India's market regulator proposed on Friday that brokers and mutual funds should stop the use of unregistered financial influencers in advertising and marketing campaigns.

The Securities and Exchange Board of India (Sebi) said in a consultation paper that influencers not registered with the relevant financial sector regulator might not have the requisite qualifications or expertise on the subject.

"Not being formally subject to a financial sector regulator's code of conduct, they may not disclose any potential conflict of interest such as their association with or interest in the products, services or securities that they promote," Sebi said.

In May, Reuters had cited sources and reported that Sebi would direct brokers and funds to limit the use of financial influencers.

Registered financial influencers would need to follow a code of conduct and guidelines issued by Sebi and exchanges while talking about financial products or stocks on social media platforms, it said.

The regulator added that brokers and mutual funds should actively disassociate themselves from unregistered entities who may be using their products or logos. It has now invited comments on the paper by September 15.