Every bull run is different from the previous one, not just in the type of stocks and sectors that lead it, but in the social changes it unleashes. The bull run that started in mid-2020 set off two major changes: one, an explosion of new account openings and second, a massive proliferation of social media handles and channels that dispense stock tips. In combination, they have become so large and influential that they mock at the three regulations of the Securities and Exchange Board of India (SEBI) that govern activities in these areas—investment advice, investment research and portfolio management. SEBI is now planning separate rules for financial influencers or fininfluencers, who give unsolicited financial advice on social media to ordinary investors on stocks, personal finance, mutual funds, etc. Will SEBI’s plan work?

Unfortunately, the genie is already out of the bottle and cannot be put back. The size, activity and influence of these people have become so large that SEBI’s onerous regulations for registered advisers look hopelessly ineffective and, those who follow them, feel like losers. The problem, SEBI must understand, is much bigger.