India’s Finance Minister Warns ‘Finfluencers’ Of Ponzi Apps
India’s finance minister Nirmala Sitharaman said that while currently there are no proposals to regulate financial influencers on social media platforms, the proliferation of scams warrants attention.
(Bloomberg) -- India’s finance minister Nirmala Sitharaman said that while currently there are no proposals to regulate financial influencers on social media platforms, the proliferation of scams warrants attention.
“If there are 3-4 people giving us objective advice, there are 7 others out of 10 who’re probably driven by some other considerations,” the minister said in response to a question on Sunday at a Thinkers Forum event in Bengaluru.
“Social influencers and financial influencers are all out there but a strong sense of caution is required in each one of us to make sure we do double-checking, counter-checking,” she added.
Sitharaman said the government is working with the Reserve Bank of India and the Ministry of Electronics and Information Technology to clamp down on ponzi applications which promise huge returns for investors.
Her statement also comes as the Securities Exchange Board of India is looking to regulate financial influencers. A SEBI study released on Jan. 25 showed that retail investors in India’s futures and options markets rose by about 500% between the financial years 2018-19 and 2021-22. Nine out of 10 incurred losses.
The topic is increasingly fraught around the world and market regulators across jurisdictions are working toward regulating “finfluencers” to protect retail investors.
Earlier this year the UK’s Financial Conduct Authority said influencers who advertise financial products on social media have become a growing concern and Australia also announced a crackdown on influencers over false advertising.
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