SEBI to bar use of live market data for investor education; launches agency to verify past returns

SEBI Chairman Tuhin Kanta Pandey on Monday said the markets regulator will soon amend its rules to prohibit the use of current or live market data in investor-education material, allowing only past market data for such purposes.

Speaking on the sidelines of an event at the National Stock Exchange, Pandey acknowledged that two SEBI circulars dealing with the use of live data for educational content had created “inconsistency,” and said the regulator would fix the issue shortly.

“It is true that there has been an inconsistency in two of our circulars dealing with live data. We will get the consistency on it. Only past market data will be used for educational purposes; current data should not be used,” Pandey said.

He stressed that there is no “regulatory vacuum” around educational content and that some violations stem from a “lack of understanding” among creators. “Our regulations clearly say that one cannot give stock-tip advice,” he added.

The comments come days after SEBI imposed a penalty and ordered disgorgement of over ₹546 crore from finfluencer Avdhoot Sathe, ruling that his activities amounted to unregistered investment advisory under the guise of education.

Pandey cited findings from a recent SEBI survey that showed 62 per cent of respondents made investment decisions based on finfluencer recommendations, while only about a third said they had adequate understanding of the securities market. He warned that exaggerated or fabricated claims by influencers and intermediaries were worsening investor vulnerability.

At the event, SEBI also launched the Past Risk and Return Verification Agency (PaRRVA), developed in partnership with the NSE and CAREEdge Ratings. The agency will independently verify historical returns claimed by registered intermediaries such as investment advisers, research analysts and algorithmic-strategy providers.

Pandey said PaRRVA sets a “global precedent” by creating a formal mechanism to authenticate past performance and curb misleading return claims. He added that credible performance data is necessary to manage investor expectations and promote responsible investing.

The regulator said the combined measures — banning live-data use in educational content and introducing independent verification of past returns — are intended to strengthen transparency and reduce the impact of unverified market advice on retail investors.