Government Empowers SEBI to Remove Misleading Stock Market Content From Social Media

The government has taken a decisive step to curb misleading financial content online by granting the Securities and Exchange Board of India (SEBI) the authority to directly order the removal of false or deceptive stock market posts, videos and messages from social media platforms. The move is expected to tighten the grip on unregulated finfluencers and protect inexperienced investors who often fall prey to promises of guaranteed returns and sensational market tips.

SEBI Gets New Powers Under IT Rules

Following a notification issued by the Finance Ministry on December 8, SEBI has now been designated as an “authorised agency” under the Information Technology Rules. This upgraded status enables the regulator to issue direct takedown instructions to platforms such as YouTube, Instagram, Telegram and X when content is found to mislead or manipulate investors.

Earlier, the takedown process required multiple approvals and took considerable time, often delaying action against harmful content. Under the new framework, SEBI can intervene swiftly if a post exaggerates stock performance, promotes unrealistic returns or shows signs of pump-and-dump activity.

Why the Crackdown Was Needed

The rise of finfluencers over the past few years has transformed social media into a hub for financial content. While many creators offer genuine insights, a substantial number operate without any certification or regulatory oversight. Despite not being registered investment advisers or research analysts, they frequently promote paid stock tips, subscription-based “exclusive clubs,” price targets and risk-free returns.

SEBI’s recent investigations have uncovered multiple instances where influencers collaborated with operators to artificially inflate the prices of small-cap stocks. Retail investors—who often rely on such content without verifying facts—end up buying at inflated prices and suffering steep losses when the operators exit.

Regulators have been warning that misinformation circulating online has escalated into a systemic risk, potentially distorting market sentiment and harming investor confidence.

How the New Rules Change the Game

Under the updated powers:

• SEBI can now instruct platforms to immediately delete misleading stock market content.

• Posts, reels, videos, live streams or messages that misrepresent returns, hide risks or promote dubious schemes will face removal.

• Platforms will be obligated to act promptly, making compliance practically unavoidable.

• Creators who violate rules may face penalties, bans or further regulatory action.

This creates a stronger deterrent for those who exploit market enthusiasm to mislead unsuspecting users.

What It Means for Investors and Content Creators

For content creators, the bar for accountability has been raised significantly. Anyone discussing stock recommendations, investment strategies or financial products must ensure that:

• Disclosures are transparent

• Claims are factual and risk-linked

• Paid promotions are clearly declared

• No guaranteed returns or misleading forecasts are presented

Unregistered creators who offer personalised tips or promote dubious schemes will be under direct scrutiny.

For investors, the change acts as a protective shield. With SEBI empowered to take swift action, the visibility of blatantly false content is expected to decline. However, experts advise that investors must still remain vigilant. No rule can replace personal due diligence.

How Investors Should Navigate Financial Content

Market experts continue to urge viewers to treat social media content only as a reference—not as financial advice. Investors should:

• Verify information from official sources

• Consult SEBI-registered advisers for personalised guidance

• Question claims that highlight only profits without mentioning risks

• Avoid content promoting “quick money,” “sure-shot returns” or secret stock picks

Diversifying investments, understanding risks and making informed decisions remain essential.

A Step Toward Safer Digital Investing

The government’s decision marks a major policy shift in regulating online financial advice. With SEBI now empowered to monitor and act directly, the ecosystem around stock market content is set to become more disciplined, transparent and investor-friendly.

While social media will continue to play a big role in financial awareness, the new framework ensures that misleading narratives will no longer go unchecked—and that retail investors, especially young entrants, face fewer risks in the digital investment landscape.