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SEBI Forms Panel to Review Mutual Fund Distributor Rules, Tackle Finfluencers

SEBI has established a working group to review the regulatory framework for mutual fund distributors and address overlaps with investment advisers. The regulator is also launching a digital platform, SEBI Setu, to provide end-to-end regulatory guidance to advisers. These moves come amid concerns over a declining number of registered investment advisers in India, with only about 1,000 currently operational. SEBI Chairman Tuhin Kanta Pandey warned that this gap risks being filled by unregulated social media finfluencers, who influence nearly 62% of prospective investors.

Key Points: SEBI Reviews Mutual Fund Distributor Rules, Launches Digital Platform

  • Working group to review MF distributor rules
  • Launch of SEBI Setu digital guidance platform
  • Standardised penalty framework for advisers
  • Concern over declining registered advisers
  • Warning on unregulated social media finfluencers
2 min read

SEBI forms working group to review rules for mutual fund distributors

SEBI forms working group to streamline rules for mutual fund distributors and investment advisers, launches SEBI Setu platform, and addresses finfluencer risks.

"The working group will examine existing regulations and suggest ways to reduce overlaps between mutual fund distributors and registered investment advisers. - Tuhin Kanta Pandey"

New Delhi, March 16

Securities and Exchange Board of India has set up a working group to review the regulatory framework for mutual fund distributors and address overlaps between distributors and investment advisers, chairman Tuhin Kanta Pandey said on Monday.

Speaking at the ARIA Aspire 2026 event, Pandey said the market regulator is working to streamline rules and bring greater clarity in the roles of different financial intermediaries.

"The working group will examine existing regulations and suggest ways to reduce overlaps between mutual fund distributors and registered investment advisers," he stated.

SEBI is also working on a common advertisement code for all intermediaries to make investor communication more consistent and reduce operational challenges across the industry.

The regulator is also preparing to launch a new digital platform called SEBI Setu, which will provide simple and end-to-end regulatory guidance to investment advisers.

"The platform is expected to help advisers better understand compliance requirements and make regulatory processes easier," he stated.

In addition, SEBI plans to introduce a standardised and light-touch penalty framework for investment advisers to ease compliance burdens. The regulator is also simplifying the certification process conducted by the National Institute of Securities Markets (NISM) for people associated with investment advice, including those involved in sales and other non-core roles.

Pandey said these steps come at a time when the number of registered investment advisers in India has been declining. He described the trend as a matter of concern, especially as the country's investor base continues to expand rapidly.

According to him, India currently has around 1,000 registered investment advisers, including about 470 individual advisers and nearly 530 non-individual entities.

Pandey warned that if the number of regulated advisers does not grow, the gap may be filled by unregulated voices, particularly financial influencers on social media.

He said many such "finfluencers" often present opinions as expert advice and speculation as investment strategy, which could mislead investors.

Citing SEBI's investor survey, Pandey noted that nearly 62 per cent of prospective investors are influenced by finfluencers.

- IANS

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Reader Comments

P
Priya S
SEBI Setu sounds promising. Navigating compliance is a nightmare for small advisers. If this platform simplifies things, maybe more qualified people will enter the field instead of leaving. The decline in registered advisers is worrying.
R
Rohit P
Finally, someone is talking about the "finfluencer" menace! My younger brother follows these Instagram guys who promise 100% returns. SEBI needs to act fast before more middle-class families lose their hard-earned savings to bad advice.
S
Sarah B
As an NRI investing in India, clarity and streamlined processes are key. A common ad code and simpler certification could make it easier to find trustworthy local advice. Hope the working group consults actual investors, not just industry bodies.
V
Vikram M
Light-touch penalties? I have mixed feelings. While ease of doing business is good, we cannot dilute accountability. The penalty should be meaningful enough to deter misconduct, especially when people's life savings are involved.
K
Kavya N
62% influenced by finfluencers? That's a shocking stat. Financial literacy in schools is the real need. Meanwhile, SEBI's move is good, but public awareness campaigns are equally important. We need to teach people to question "free" advice.

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