Sebi’s crackdown on unregistered financial advisors: A new era in the securities market

Sebi, India’s market regulator, has imposed a three-month deadline on registered entities to sever ties with unregistered financial advisors, in a bid to mitigate unauthorized advice and strengthen market integrity securities.

The decision follows changes to the rules by Sebi in August, promoting a strict stance against entities not properly registered. This regulation prohibits intermediaries and their agents from partnering with unregistered advice providers, excluding those operating through specified digital platforms.

The Sebi guidelines also propose that specified digital platforms should use AI/ML tools to detect unauthorized activities, while promoting investor educational content. Public comment on these measures is requested until November 12.

(With input from agencies.)