Introduction
On 22 October 2026, SEBI issued a press release cautioning investors against stock tips and trading calls circulated through invitation-only WhatsApp groups. On its face, this is an investor-protection advisory. It also shows how unregistered advice moves through closed digital channels, and why the compliance obligations of fintechs, intermediaries and finfluencers matter in this space.
What Exactly Did SEBI Flag?
SEBI observed that certain unregistered persons, often using overseas WhatsApp numbers, share buy and sell calls in the name of free investor education. Two tactics stood out. Astroturfing, some group members act in concert with the operators, posting false profit claims and praising the so-called “expert”. This creates a false impression of genuine support and induces unsuspecting investors to act on the call.
Replacement groups, when a group is suspended after action by enforcement agencies or regulators, members receive a message, usually from a new number. It claims the earlier group was banned because of the social media platform’s risk control measures, and invites them to join a new one. SEBI advised investors not to join such groups, not to be swayed by praise, profit claims or trade confirmations, and to treat “group banned, join the new one” messages as red flags. It also cautioned against opening accounts on, or transferring money to, platforms or apps recommended by these groups, and against sharing holdings or trading account details. Investors should deal only with SEBI-registered intermediaries and authentic trading apps. Registration status can be checked on SEBI’s website, and trading apps through its investor support portal.
What Does This Mean for Fintechs and Regulated Entities?
SEBI’s regulations (Regulation 16A of the Intermediaries Regulations, 2008, Regulation 44B of the SECC Regulations, 2018 and Regulation 82B of the DP Regulations, 2018), in force since 29 August 2024, bar persons regulated by SEBI, MIIs and their agents from any direct or indirect association with a person who:
- Gives securities-related advice or recommendations without being registered or permitted by SEBI; or
- Makes claims of returns or performance without SEBI’s permission.
Three points from SEBI’s clarification circular of 29 January 2025 deserve attention.
“Association” is wide, it covers a transaction involving money or money’s worth, referral of a client, interaction of IT systems, or any similar association. Payments, referral fees and sharing client information with such a person are not permitted. Responsibility sits with the regulated entity, it must ensure that anyone associated with it, or with its agents, does not engage in the prohibited activities. Agents can include employees, mutual fund distributors and authorised persons of stock brokers. Intermediaries were also asked, by a circular of 22 October 2024, to terminate existing contracts with such persons within three months.
Marketing is not exempt, branding and promotion are permitted only if the other person is not engaged in the prohibited activities. Advertising through a marketing agency can still amount to a violation if the entity indirectly ends up associated with such a person. The circular also addresses digital platforms where the entity has no control over the content or entity it gets associated with. Fintechs running affiliate or influencer campaigns should review their arrangements with this in mind.
Consequences may include enquiry, adjudication, penalty, suspension or cancellation of registration, and debarment. One safeguard is worth noting. Merely providing a demat or trading account to a person is not association. But if that account is used for the prohibited activities, the intermediary is expected to take action, including deactivating the services.
What Does This Mean for Finfluencers?
The line between education and advice is the most important one. SEBI’s circular says a person engaged solely in education is one who is not giving unregistered advice or making return claims. Such a person should not use market price data of the preceding thirty days to speak about, or display, the name of any security (including a code name) in a manner indicating future price, advice or recommendation. This is a recent change. The circular was modified with effect from 8 May 2026, and the earlier text referred to the preceding three months. Anyone relying on older commentary about a “three-month rule” should check the current position.
Is Enforcement Following the Same Line?
A recent matter shows how SEBI looks at “education”. In Avadhut Sathe Trading Academy Pvt. Ltd. v. SEBI (Appeal No. 545 of 2025), the Securities Appellate Tribunal in January 2026 upheld SEBI’s ex-parte interim order, finding a prima facie case of violation of the IA and RA Regulations. It reduced the amount to be secured from ₹546.17 crore to ₹100 crore.
SEBI alleged, among other things, that live market data was used in classes to give stock recommendations, that selective testimonials were uploaded on YouTube, and that paid WhatsApp groups were used to share tips with targets and stop-loss levels. The academy denied wrongdoing and said its courses were purely educational. These are allegations in interim proceedings, and the matter is yet to be decided finally.
The Bigger Picture
CFA Institute’s study of 48 Indian finfluencers (January to October 2025) found that only three (6.3%) were SEBI-registered, while 16 (33.3%) gave explicit buy, hold or sell recommendations. More than a third did not adequately disclose conflicts of interest or brand partnerships. The report concluded that the challenge is not only bringing more creators into the regulatory perimeter, but clarifying when social-media activity becomes regulated advice.
SEBI’s earlier press releases of 2025 point the same way. They warned that investors dealing with unregistered entities may not get the benefit of SCORES or the exchange and depositories’ dispute resolution mechanisms.
A Practical Checklist
- Fintechs and intermediaries, map every referral, affiliate, sponsorship and data-sharing arrangement, and verify whether the counterparty gives advice or makes return claims.
- Agents and distributors, extend the same checks, since the principal is responsible for them.
- Finfluencers, keep content clearly educational, avoid return claims, and register if you give recommendations.
- Investors, verify registration before acting on any tip.
AMLEGALS REMARKS
SEBI’s latest advisory is a reminder that the fight against unauthorised tips is increasingly being fought through accountability in the ecosystem, not only through action against individual tipsters. Regulated entities are expected to know whom they associate with, and creators are expected to know which side of the education-advice line they stand on. For fintechs, a robust due-diligence and monitoring framework is now a necessity rather than a best practice. For finfluencers, clarity of purpose and registration where required remain the safest route.
For any queries or feedback, feel free to connect with Hiteashi.desai@amlegals.com