‘Finfluencers’ Now Have To Follow Securities Commission’s Guidelines

In order to address the growing number of financial influencers or ‘finfluencers’ as they’re popularly known, the Securities Commission (SC) has updated their Guidance Note to include some sets of regulations for these finfluencers.

In a press release, the SC stated that the update on the Guidance Note is done with the aim of ensuring all sectors are equally covered in terms of regulatory treatments.

This is due to the fact that providing investment advice is regulated by the SC. In recent years, many social media platforms have become the go-to place to promote financial services and products using influencers.

Promoting financial products on social media

Before the update to the Guidance Note, finfluencers fall into a gray area, as their content was not considered as fully fledged investment advice.

With the update, the Guidance Note clarifies that promotion of a capital market product on social media platforms may require a licence from the SC in certain circumstances.

To help finfluencers better understand what they should do and should avoid when making their content, SC has published an informative infographic with frequently asked questions and a checklist.

Promotion of unlicensed products is an offence

For example, the sharing of financial insights or recommendations that promote certain capital market products to followers with expectation of commissions or other rewards will require a licence.

If finfluencers fail to comply with the Guidance Note’s directive, SC also reminded that engaging in unlicensed regulated activities is an offence which is punishable under the Capital Markets and Services Act 2007 (CMSA), and a person found guilty can be slapped with a fine not exceeding RM10 million or imprisonment not exceeding ten years or both.

In the press release, SC also reminded finfluencers to verify that the companies they promote are licensed or approved by the SC by using the SC’s Investment Checker.

For more information, you can check out SC’s guidance note right here.