Sebi Introduces Biannual Social Media Disclosure Requirements for Investment Advisors

In an effort to enhance transparency and regulate the dissemination of financial advice, the Securities and Exchange Board of India (Sebi) has mandated that all registered investment advisors disclose comprehensive details of their social media presence twice a year. This regulatory move necessitates investment advisory service providers (IAASBs) to report on their usage of various social media platforms, including accounts, pages, channels, or any other forms of digital communication leveraged to connect with their clientele or the investing public.

Understanding Sebi's New Mandate

The integrity of financial advice shared through social media channels has been a growing concern. To address this, Sebi's latest guidelines aim to ensure that the information provided by investment advisors is transparent and easily scrutinized. By requiring an updated disclosure of social media details biannually, Sebi looks to curb misleading advice and maintain high professional standards within the financial advisory ecosystem.

Compliance and Operational Transparency

Investment advisors will now need to furnish not only their social media details but also intricate operational information. This includes aspects such as their investment strategies, risk assessment procedures, types of accounts managed, advisory fees structure, conflict of interest disclosures, and any affiliations with other financial services. The goal is to allow stakeholders, including potential and existing investors, to better understand advisors’ approach to investment and risk management. Such initiatives resonate with global trends aimed at increasing the accountability of financial intermediaries and enhancing investor protection.

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