SEBI takes down 1.2 lakh misleading finfluencer posts, steps up AI surveillance

The Securities and Exchange Board of India (SEBI) has removed over 1.2 lakh misleading social media posts linked to unregistered financial influencers. SEBI Chairman Kanta Pandey told ANI that the regulator identified and acted against content that violated its norms on investment advice.

Pandey said that individuals offering investment advice must be registered with SEBI and adhere to specific do’s and don’ts. While acknowledging that financial education and freedom of expression are fundamental rights, he clarified that the regulator intervenes when content crosses into misleading advisory territory that could harm investors.

To strengthen digital oversight, SEBI has deployed an in-house artificial intelligence tool named Sudarshan. The tool tracks audio, video and text-based content across platforms to detect violations and pinpoint transgressions in real time. According to the ANI report, social media platforms have cooperated with the regulator in removing flagged content.

The latest action marks a sharp escalation from late 2024, when SEBI had taken down over 70,000 misleading posts and handles associated with unregistered finfluencers. The jump from 70,000 to more than 1.2 lakh removals underscores both the scale of non-compliant financial content online and the regulator’s expanded surveillance capabilities.

The crackdown comes amid heightened retail participation in derivatives markets, particularly options trading, following the Covid-19 pandemic. Pandey told ANI that many retail investors were influenced by social media narratives suggesting easy profits in options. However, SEBI data has shown that a majority of retail participants in options trading incur losses.

In response, the regulator introduced prominent statutory risk warnings for derivatives trading, highlighting that nine out of ten investors lose money in options. It has also restricted the use of live market data in so-called educational content unless the creator is registered, a move that industry estimates suggest has affected 45 to 60 percent of finance-related brand collaborations.

Industry observers say SEBI’s use of AI-led monitoring reflects a broader shift toward technology-driven regulation in digital markets. With BFSI brands among the largest digital advertisers in India, compliance standards are tightening across influencer partnerships and financial campaigns.

Viineet Goyal, Vice President - Branding and Digital Marketing at SMC Global Securities Limited, said the latest circular marks a significant step toward strengthening transparency in the digital space. “By mandating SEBI-regulated entities and their agents to display their registered name and registration number across social media handles, including on all content they upload, the regulator has drawn a clear line between authorised intermediaries and unregistered operators,” he said.

Goyal pointed to findings from the SEBI Investor Survey 2025, which indicate that nearly 62 percent of investors rely on financial influencers for some or most of their investment decisions. In this context, he said, establishing a visible demarcation between registered and unregistered entities is critical to safeguarding investors and maintaining market integrity.

Makarand M Joshi, Founder Partner at MMJC and Associates, said the February 26, 2026 circular applies not only to traditional market intermediaries but also to REITs and InvITs.

“The SEBI circular dated 26th February 2026 requires the SEBI registered entities including REITs and InVITs to disclose their registered name and registration number at the top of any content including videos posted on any social media platform including YouTube. This circular is effective from 1st May 2026,” Joshi said.

“In the backdrop of the deceptive and unverified information circulating through social media platforms, this SEBI circular will make it more difficult for the fraudsters to circulate unverified information in the name of the market intermediaries. Also, a point worth noting is that, this circular is addressed to InVITs and REITs as well. Considering the government’s intention to develop INVIT and REIT models and the increased fund flow in these entities, the market regulator intends to protect the interest of investors in these entities and hence the precautions applicable to other market intermediaries are made applicable to them as well,” he added.

As reported by ANI, SEBI has made it clear that while financial literacy is encouraged, misleading advice without registration will invite enforcement. With tools like Sudarshan embedded in its surveillance framework, the regulator is moving toward continuous digital monitoring in an increasingly influencer-driven investment ecosystem.