“The clearest line yet between education and advice is that educators can explain concepts and rely on data older than three months, while any reference to a live stock or recent price tips crosses into advisory territory,” said Ketan Mukhija, senior partner at Burgeon Law, citing a regulatory circular.
“Grey areas persist, showing examples from specific sectors, using old trading simulations, or making hints about the current market that could be treated as advice if they influence investment choices,” he said. The safest course for educators is to keep “education strictly educational,” he said, citing the Securities and Exchange Board of India’s (Sebi’s) readiness to impose market bans, refunds, and initiate criminal prosecution.
On 20 August, Sebi’s enforcement team raided the Avadhut Sathe Trading Academy, retail investor training centre, following complaints that such academies were allegedly helping operators manipulate penny stocks by introducing specific examples in teaching sessions. Sebi’s concern: that educational efforts too often blur into disguised stock recommendations, fueling price surges.
Sebi had clarified in June 2024 that naming stocks on their social media channels will mark them out as individuals that regulated entities must avoid. “You open your mouth and utter a single name (of securities), you stop being an educator and start being an advisor,” then Sebi chairperson Madhabi Puri Buch had told Mint on the sidelines of an event.
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Sathe, who boasts over 936,000 YouTube subscribers, rejected the “finfluencer” label. “We do not publish research reports, give personalised investment advice, or promise returns,” the academy stated, citing its mission to “empower individuals with knowledge, skill, and discipline—to build independent, responsible market participants.” The academy pledged full transparency and cooperation with the regulator.
With demat accounts exceeding 20 crore in August, Sebi aims to encourage genuine investor education while stamping out unregistered advice. The regulator is concerned that educational efforts too often blur into disguised stock recommendations, fuelling price surges. Sebi is forcing trainers and influencers to reevaluate their methods to ensure investor protection remains paramount.
Education vs advice
Sebi’s January 2025 circular says educators may only use stock data older than three months—live prices and recent tips are banned. The regulator and legal experts define legitimate education as imparting market concepts, historical chart patterns, risk management strategies, and economic theories. Any mention of specific securities, live data, or investment opinions, particularly actionable tips, is forbidden unless the educator is a registered adviser.
“Rules are explicit: prohibited activities include any recommendation or advice on specific stocks directly or indirectly; claims of returns, and use of live market data,” said Alay Razvi, managing partner at Accord Juris. Razvi said grey areas like coded language, demo trades, or indirect references can expose firms to vicarious liability through associations or collaborations.
According to Nandini Pathak, partner at Bombay Law Chambers, the line becomes blurred when examples or hypotheticals seem like tailored advice: “General educational sessions that name specific products can morph into advice, indicative messaging or promotional framing may cross into advisory territory. Disclaimers may help with exoneration, but do not give absolute immunity.”
Setting an example
Sathe’s case stands out because of his large audience and the alleged mixing of education with near-real-time trading cues and solicitation without Sebi registration.
“Targeting high-profile educators signals that popularity provides no regulatory immunity. The intention is to establish clear boundaries for the entire finfluencer ecosystem, not just address one individual’s actions,” said Pranav Bhaskar, senior partner & head of corporate practice at SKV Law Offices.
Varun Agarwal, a stock market educator, said, “Sebi has indeed been introducing new rules and regulations quite frequently, and as research analysts, we are doing our best to keep up with them. We rely not only on our own understanding but also on the expertise of professionals who specialize in compliance.”
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He added that engaging with a consultant helped ensure timely and strict adherence. “While Sebi’s guidelines are not always crystal clear, I firmly believe that if one has the right intent to comply, the path becomes manageable.”
Ambiguity remains
Bhaskar of SKV Law Offices flagged ambiguity on where the line between education and advice can be drawn.
“The practical distinction hinges on whether content seeks to influence specific investment decisions or merely imparts general market knowledge,” he said. “[But] the distinction between education and advice remains ambiguous, particularly when educators discuss specific stocks or current market conditions during training sessions.”
He warned that the three-month data rule brings interpretative complexities and cross-border, anonymous finfluencers make oversight difficult. He also flagged that there is no structured appeals process for those accused of breaking the rules.
Pathak of Bombay Law Chambers has a more nuanced take on this. “There is no specific guidance which can objectively assist in classifying all activities squarely into education and advice,” she said. “Neither is it practicable to do so.”
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