Jobaaj Stories
In a recent discussion, Nithin Kamath, the CEO, and co-founder of Zerodha, the largest brokerage in India, highlighted the pressing need for regulatory oversight of finfluencer activity in the securities market. As a member of the Securities and Exchange Board of India's Secondary Market Advisory Committee, Kamath emphasized the committee's responsibility to recommend measures that enhance market safety, efficiency, transparency, and integrity.
Kamath expressed concerns regarding the impact of finfluencer activity on investor expectations and emphasized the importance of addressing regulatory ambiguity surrounding these influencers. While brokerages often partner with influencers to attract investors to their platforms and share a portion of the brokerage with them, Kamath stressed the necessity of long-term regulation, even if it affects these partnerships in the short term.
He mentioned that certain individuals have faced regulatory action from the Securities and Exchange Board of India (Sebi), leading to a reduction in finfluencer activity. However, Kamath acknowledged the need for clearer regulations to prevent misleading investor expectations set by some influencers.
Zerodha, as a brokerage, conducts due diligence before engaging with influencers as associate partners, ensuring that they hold appropriate Sebi registration and provide reliable stock advice. Kamath also encouraged finfluencers to take legal action, such as filing police complaints, against fake channels impersonating them on platforms like Telegram and WhatsApp.
Kamath emphasized that regulations would play a pivotal role in curbing misleading finfluencer messaging, stopping approximately 99 percent of such activities. Despite the additional compliance-related work, he affirmed Zerodha's commitment to regulatory responsibility as a regulated business dealing with crucial financial matters.
By implementing stringent regulations, the aim is to safeguard investors and ensure they enter the stock market with accurate expectations.
Also read, By 2075, India will become the world’s second-largest economy
