New Delhi: The Securities and Exchange Board of India (SEBI) has introduced stringent new rules concerning stock market education.
The regulatory body issued a circular late on January 29, 2025, explicitly prohibiting the use of live market prices by individuals or entities providing educational content related to stock market investments.
This development aims to curb the practice of offering real-time trading tips and advice under the guise of educational content, a tactic often employed by unregistered finfluencers to attract followers and generate revenue.
According to the new guidelines, those engaged in stock market education must use stock prices with at least a three-month lag. This measure effectively prevents the dissemination of immediate, actionable trading advice that could mislead investors into making uninformed decisions based on real-time market data.
"The use of live market data in educational contexts has been a grey area, often exploited for personal gain rather than genuine education," said SEBI's spokesperson. "Our objective is to ensure that educational content does not cross into the territory of unregulated investment advice."
The circular further clarifies that educators in the stock market domain must not misrepresent their services as purely educational if they are providing any form of investment advice, recommendations, or making performance claims without the appropriate SEBI registration. This includes not discussing or displaying stock names, codes, or price data from the past three months in any manner that could suggest investment advice.
This crackdown follows months of scrutiny over the activities of finfluencers, many of whom have been accused of manipulating markets, promoting pump-and-dump schemes, and misleading novice investors with promises of quick returns.
SEBI has also warned that violations of these new rules could lead to penalties, including fines or suspension/cancellation of registration for those entities that are registered with the board.