SEBI Prohibits Companies from Collaborating with Unregistered Financial Influencers

At its board meeting on June 27, the Securities and Exchange Board of India (SEBI) made several important decisions:

1. SEBI has barred regulated entities from associating with unregistered financial influencers. However, entities regulated by SEBI and their agents are exempt from this ban.

2. SEBI approved a proposal allowing Category I and II Alternative Investment Funds (AIFs) to borrow capital for up to 30 days to address temporary shortfalls in investor drawdowns while making investments. The borrowing costs must be charged to the specific investors responsible for the shortfall, with a mandatory 30-day cooling-off period between two borrowings.

3. The board limited the extension of Large Value Funds (LVF) tenure for Accredited Investors to five years, contingent on approval by two-thirds of unit holders by value.

4. SEBI revised the eligibility criteria for the entry and exit of stocks in the derivatives markets, applying exit criteria only to stocks that have been in the derivative segment for at least six months. A new Product Success Framework for single stock futures and options will be introduced to support market development, regulation, and investor protection, effective six months from the circular's issuance.

5. The board streamlined the application process for public issues of debt securities through intermediaries, mandating the use of UPI for individual investors for investments up to INR 5 lakhs.

These measures follow SEBI's recent actions against unregistered financial influencers, including barring Hyderabad-based finfluencer Mohammad Nasiruddin Ansari and penalizing PR Sundar for unregistered advisory services.