SEBI’s Ananth Narayan Warns Against Unregistered Advisors, Calls for Self-Regulation
Since Oct 2024, SEBI has taken aggressive steps to combat this issue, working with social media companies to remove over 70k misleading handles and posts that misguide investors.
There is a growing menace of unregistered investment advisors and research analysts exploiting the rising interest of investors in financial investments, said Ananth Narayan, whole time member at SEBI, while speaking at a Mumbai event.
Since Oct 2024, SEBI has taken aggressive steps to combat this issue, working with social media companies to remove over 70k misleading handles and posts that misguide investors, he said.
He further mentioned the UPI “Payright” handle, which has been proposed to help investors clearly identify SEBI-registered entities. This initiative seeks to create a gated virtual community of trusted advisors, ensuring that investors are not duped by fraudsters. Narayan also emphasised self-regulation with such instances using an association for RAs and IAs, just like AMFI exists for mutual funds.
Talking about the Foreign Portfolio Investment (FPI) flows, Narayan said that despite recent global economic fluctuations, they have remained resilient. Over the last five fiscal years, India has attracted FPI inflows of $54 billion—$21 billion in equity and $33 billion in debt, he said.
Additionally, Narayan called for responsible investing and risk awareness among retail investors. While mutual funds have been promoted under the “Mutual Funds Sahi Hai” campaign, he reminded the audience that “Mutual Fund Investments are Subject to Market Risk”, a reality that recent market trends have demonstrated.
SEBI and investment advisors have a shared responsibility in spreading investor education and ensuring informed decision-making, he said.
Thereafter, he shifted focus to investor awareness. He said that SEBI is currently conducting a nationwide survey to refine its investor awareness strategies, with prominent industry leaders, including Harsh Roongta, contributing to its Investor Education and Protection Fund (IEPF) committee.
He also spoke about the need to strike a balance between minimising regulatory roadblocks and preventing market misconduct.
Addressing both Type 1 errors (where regulatory lapses endanger trust) and Type 2 errors (where excessive regulation stifles legitimate business), he called for a more collaborative approach between regulators and market participants.
