Page 17 - Banking Finance May 2025

MUTUAL FUND

Sebi May Allow Promoters with long-term corporate performance The findings call for stronger certifica-
goals even after reclassification. tion standards, mandatory transpar-
to Retain ESOPs Post-IPO ency on social media platforms, and
The Securities and Exchange Board of Only 2% of Finfluencers stricter regulatory oversight to protect
India (Sebi) has proposed amendments Registered with Sebi, retail investors from misinformation
that would allow founders classified as and biased advice.
"promoter" or "promoter group" in a Study Finds
company's draft offer document to A study by the CFA Institute has re- Sebi Removes 70,000 Mis-
continue holding employee stock op- vealed that only 2% of financial
tion plans (ESOPs) or stock appreciation influencers (finfluencers) are registered leading Online Posts to
rights (SARs) granted at least one year with Sebi, even though 33% provide Curb Misinformation
prior to an initial public offering (IPO). direct stock recommendations. The Since October 2024, the Securities and
Currently, promoters and promoter report highlights concerns over the Exchange Board of India (Sebi) has re-
group members are ineligible to re- growing influence of unregulated moved over 70,000 misleading online
ceive ESOPs under Sebi rules, creating finfluencers on investor decisions. posts and accounts in collaboration
challenges particularly for new-age "Investors must remain vigilant, seek with social media platforms, Sebi's
tech companies headed for listing. investment guidance from Sebi-regis- Whole-Time Member Ananth Narayan
"ESOPs are a great tool to align the tered advisors, and evaluate the cre- revealed.
interest of founders that hold signifi- dentials of the influencers they follow," "A common worry for all of us is the
cantly diluted stakes with the said Arati Porwal, Country Head of CFA menace of unregistered investment
company's performance. Allowing such Institute - India. advisors/research analysts, who are
founders to continue holding ESOPs The study also found that 63% of cashing on the rising interest in invest-
post reclassification as a promoter, finfluencers do not disclose sponsor- ments," Narayan said at the Associa-
provides policy outcome certainty," ships or financial affiliations, raising tion of Registered Investment Advisors
said Vishal Yaduvanshi, Partner, Cyril risks of conflicts of interest. Alarmingly, (ARIA) summit.
Amarchand Mangaldas. 8% of investors surveyed reported
He outlined Sebi's proposal to use UPI
The proposed relaxation is expected to being duped by finfluencers' advice, 'Payright' handles to help investors
provide relief to founders facing stake with older investors over 40 more easily identify registered entities.
dilution, ensuring better alignment vulnerable. Narayan also announced plans for a
nationwide survey to enhance Sebi's
Investors to Access Demat and MF Holdings via investor education strategy and lever-
age the accredited investor model to
DigiLocker from April 2025 better target risk-aware individuals.
In a move aimed at enhancing investor protection and financial transparency, The crackdown is part of Sebi's broader
the Securities and Exchange Board of India (Sebi) has partnered with effort to tighten regulation over
DigiLocker to enable investors to securely store and access their demat hold-
finfluencers, stock recommendations,
ings, mutual fund statements, and consolidated account statements (CAS). and misleading online content that
The facility will be available from April 1, 2025, Sebi announced through a may impact investor interests.
circular. DigiLocker users will now be able to fetch and store their demat
account details, mutual fund investments, and CAS, expanding the platform's Groww Mutual Fund
suite of financial services that already includes bank statements, insurance
policies, and NPS statements. Launches Gilt Fund Target-
This initiative aims to streamline record-keeping and ensure that investors, ing Sovereign Debt Invest-
along with their legal heirs, have seamless access to securities holdings. The ments
move also strengthens the overall digital financial ecosystem by bringing Groww Mutual Fund has launched the
securities-related documents under the DigiLocker framework.
Groww Gilt Fund, an open-ended debt

BANKING FINANCE | MAY | 2025 | 15