INTRODUCTION
Social media has produced a new kind of market participant: the financial influencer, or ‘finfluencer’, who dispenses stock tips, trading strategies, and paid ‘courses’ promising consistent profit to audiences running into the hundreds of thousands, without ever registering with a financial regulator. India’s retail investor base has grown explosively since 2020, and a meaningful share of that growth has been steered by content on YouTube, Instagram, and Telegram rather than by licensed investment advisers. The Securities and Exchange Board of India has spent the better part of three years working out how to respond, moving on two fronts at once: high-profile enforcement action against individual finfluencers and a more structural attempt to choke off the commercial relationships that fund the wider ecosystem. This piece maps that two-track strategy and asks whether either track, on its own, is equal to the scale of the problem.
THE LEGAL HOOK: AN OLD REGISTRATION REQUIREMENT
The starting point is unglamorous but decisive. Section 12(1) of the Securities and Exchange Board of India Act, 1992, requires anyone acting as a stockbroker, investment adviser, or other listed market intermediary to be registered with SEBI; acting in any of those capacities without registration is unlawful on its own terms, regardless of whether the unregistered person calls the activity ‘education’, ‘mentorship’, or a ‘course’.[1] SEBI’s own internal assessment, placed before its Board in July 2024, framed the problem starkly, noting that finfluencers were inducing followers to deal in securities or purchase financial products in return for undisclosed compensation, often while regulated brokers and asset managers quietly benefited from the traffic and conversions these creators generated.[2]
TRACK ONE: ENFORCEMENT AGAINST INDIVIDUAL OFFENDERS
SEBI’s first instinct was prosecutorial rather than legislative. In May 2023, it barred the trader and YouTuber P R Sundar, his firm Mansun Consulting, and a co-promoter from the securities market for one year, requiring them to disgorge close to six crore rupees in advisory fees and accrued interest for running an unregistered advisory service through paid Telegram groups.[3] Months later, in October 2023, SEBI issued an interim order against Mohammad Nasiruddin Ansari, who traded under the handle ‘Baap of Chart’, alleging that trading recommendations had been dressed up as paid educational courses and directing that the funds collected be impounded pending inquiry. It confirmed these findings in a final order issued on 2 December 2024, directing Ansari and six associated entities to jointly refund seventeen crore rupees collected from investors within three months and imposing further monetary penalties on each of them.[4] The trend has only escalated since, though not without checks. In December 2025, SEBI’s ex-parte interim order against Avadhut Sathe, founder of a trading academy built around a large paid-course business, impounded more than five hundred and forty-six crore rupees, by a wide margin the largest such action to date. On appeal, the Securities Appellate Tribunal reduced the deposit requirement to one hundred crore rupees in January 2026, a modification the Supreme Court declined to disturb two months later, suggesting that even SEBI’s boldest interim directions are subject to real appellate scrutiny.[5]
TRACK TWO: CUTTING OFF THE COMMERCIAL PIPELINE
Enforcement against individual offenders, however large the sums involved, only ever reaches the cases SEBI has the resources to investigate one at a time. The more structural intervention came through an amendment to the SEBI (Intermediaries) Regulations 2008, which inserted a new regulation 16A with effect from 29 August 2024.[6] The amendment does not purport to regulate finfluencers directly. Instead, it forbids every SEBI-registered intermediary, including brokers, mutual funds, portfolio managers, and research analysts, from maintaining any direct or indirect association with a person who provides unregistered advice or makes return-related claims about securities, whether or not money changes hands. A circular issued that October went further, directing every regulated entity to terminate existing arrangements of this kind within three months.[7] The underlying logic is one of supply-side disruption: rather than chase every creator individually, starve the ecosystem of the broking referral fees, distribution commissions, and sponsorship arrangements that make large-scale finfluencing commercially viable.
CLOSING THE EDUCATION LOOPHOLE
The obvious response from creators was to recast recommendations as ‘education’. SEBI’s January 2025 circular closed much of that gap by drawing a sharper line: a person engaged solely in education must not reference the price of a security, including through code names or ticker displays, using data less than three months old and must not make any claim, express or implied, about future price movement, return, or performance.[8] Cross that line by giving a security-specific buy or sell call or by guaranteeing a return, and the activity becomes investment advice or research, triggering the registration requirement irrespective of how it is labelled.
THE GAPS THAT REMAIN
This two-track strategy is more coherent than it might first appear, but it leaves real gaps. Regulation 16A only bites where a finfluencer has some financial relationship with a SEBI-registered entity; an independent creator who sells subscriptions or paid courses directly to followers, the model behind both the Baap of Chart and Avadhut Sathe orders, sits outside its reach and can only be caught after the fact, through enforcement under section 12(1) of the regulations on fraudulent and unfair trade practices.[9] The scale problem is also unresolved: a study released by the CFA Institute in March 2025 found that only about two per cent of finfluencers were SEBI-registered, even though roughly a third of them gave explicit stock recommendations to their audiences.[10] Any framework built around catching violations after the harm has already crystallised will struggle to keep pace with content produced at that volume.
A CONSTITUTIONAL BOUNDARY
There is also a constitutional dimension that SEBI has had to tread carefully around. Generic financial commentary and opinion enjoy the protection of the freedom of speech and expression, and the right to carry on a trade or business extends, in principle, to those who produce financial content for a living, subject to reasonable restrictions in the interest of the general public.[11] SEBI’s framework is therefore deliberately calibrated to regulate specific conduct, unregistered advice, fraudulent claims, and undisclosed commercial association, rather than financial speech as such, leaving room for genuinely educational content even as it tightens the net around disguised advisory businesses.
CONCLUSION
Three years on from its first major order against a finfluencer, SEBI has assembled a layered response: aggressive and increasingly large enforcement actions against the worst offenders, a structural rule cutting registered intermediaries out of the finfluencer economy, and a sharper definitional line between education and advice. What it has not yet demonstrated is an enforcement architecture capable of matching the sheer volume of unregulated financial content produced every day. Until it does, the gap between the small fraction of finfluencers who are registered and the much larger universe that is not is likely to remain the central fault line in this corner of securities regulation.
Author(s) Name: Sara Gurunath Parab (S.N.D.T. Women’s University Law School, Juhu Campus)
References:
[1] Securities and Exchange Board of India Act 1992, s 12(1)
[2] ‘Proposal on association of persons regulated by the SEBI and the agents of such persons with persons who directly or indirectly provide advice or recommendations without being registered with SEBI or make any implicit or explicit claim of return or performance in respect of or related to a security or securities under the purview of SEBI’ (Securities and Exchange Board of India) <https://www.sebi.gov.in/sebi_data/meetingfiles/jul-2024/1719916854117_1.pdf> accessed 17 June 2026
[3] ‘Settlement Order in respect of Mansun Consultancy Private Limited, Mr. P.R.Sundar and Ms. Mangayarkarasi Sundar’ (Securities and Exchange Board of India, 25 May 2023) <https://www.sebi.gov.in/enforcement/orders/may-2023/settlement-order-in-respect-of-mansun-consultancy-private-limited-mr-p-r-sundar-and-ms-mangayarkarasi-sundar_71701.html> accessed 17 June 2026
[4] ‘Interim Order cum SCN in the matter of unregistered investment advisory activities of Mohammad Nasiruddin Ansari/ Baap of Chart’ (Securities and Exchange Board of India, 25 October 2023) <https://www.sebi.gov.in/enforcement/orders/oct-2023/interim-order-cum-scn-in-the-matter-of-unregistered-investment-advisory-activities-of-mohammad-nasiruddin-ansari-baap-of-chart_78333.html> accessed 17 June 2026; ‘Final Order in the Matter of Unregistered Investment Advisory Activities by Baap of Chart’ (Securities and Exchange Board of India, 02 December 2024) <https://www.sebi.gov.in/enforcement/orders/dec-2024/final-order-in-the-matter-of-unregistered-investment-advisory-activities-by-baap-of-chart_89200.html> accessed 17 June 2026
[5] ‘Sebi impounds ₹546 cr, bars Avadhut Sathe academy for alleged violations’ Business Standard (04 December 2025) <https://www.business-standard.com/markets/news/sebi-impounds-rs546-cr-bars-avadhut-sathe-academy-unregistered-advice-125120401454_1.html> accessed 17 June 2026; ‘Securities Appellate Tribunal Grants Partial Relief to Avadhut Sathe in SEBI Case, Orders ₹100 Crore Deposit’ (Moneylife, 22 January 2026) <https://www.moneylife.in/article/securities-appellate-tribunal-grants-partial-relief-to-avadhut-sathe-in-sebi-case-orders-100-crore-deposit/79453.html> accessed 17 June 2026; ‘Supreme Court Refuses Relief to Avadhut Sathe Trading Academy, Permits ₹2.25 Crore Monthly Expenses’ (Moneylife, 24 March 2026) <https://www.moneylife.in/article/supreme-court-refuses-relief-to-avadhut-sathe-trading-academy-permits-225-crore-monthly-expenses/80028.html> accessed 17 June 2026
[6] SEBI (Intermediaries) (Amendment) Regulations 2024, reg 16A; ‘Sebi cracks down on ‘finfluencers’ with new rules on stock education’ Business Standard (30 January 2025) <https://www.business-standard.com/markets/news/sebi-finfluencer-circular-live-stock-data-market-education-rules-125013000571_1.html> accessed 17 June 2026
[7] ‘SEBI Orders Registered Entities to Cut Ties with Unregulated Finfluencers’ (Outlook Business, 24 October 2024) <https://www.outlookbusiness.com/markets/sebi-directs-regulated-entities-to-sever-ties-with-finfluencers-in-3-months> accessed 17 June 2026
[8] ‘Cutting Ties with Finfluencers: SEBI Distinguishes Between Education & Advice’ (Lexology, 10 February 2025) <https://www.lexology.com/library/detail.aspx?g=ec305bf3-902a-43da-8fd6-00061e812f5f> accessed 17 June 2026
[9] SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations 2003
[10] Khushboo Tiwari, ‘Only 2% of Finfluencers Sebi-Registered, Yet 33% Give Stock Recommendations’ Business Standard (20 March 2025) <https://www.business-standard.com/amp/markets/news/only-2-of-finfluencers-sebi-registered-yet-33-give-stock-recommendations-125032001196_1.html> accessed 17 June 2026
[11] Constitution of India 1950, arts 19(1)(a), 19(1)(g), 19(2), 19(6)