Emirates new licensing scheme specifically aims at finfluencers
Measure highlights wildly divergent global regulatory landscape
If you had Tweeting out stock tips from a 105th-floor apartment in the Burj Khalifa on your personal vision board, we’ve got some bad news: You’re going to need a license.
Earlier this year, the United Arab Emirates Securities & Commodities Authority, the Gulf State’s version of the SEC, adopted what may be the first licensing regime specifically created for finfluencers. The UAE regulations require individuals offering recommendations for financial products or services on social media—or any public platform, digital or analog, for that matter—to register.
In order to qualify, they must already be registered as an analyst with the regulator or hold a CFA certificate. Additionally, they have to prove they’re already influential by attracting at least 1,000 real followers (no bots!) or being quoted in the media. Alternatively, they must have at least six months of professional experience in finance.
The agency sought to jumpstart the initiative and attract participants by waiving registration fees for the first three years.
The Emirates may be unique in creating a mechanism specifically for finfluencers who aren’t registered or affiliated with a registered entity to become registered and continue publishing advice and recommendations in a compliant way, but it is not the only regulator focusing on the growth of online financial influencers.
Other jurisdictions have approached the issue by either prohibiting unlicensed individuals and entities from making recommendations altogether (the UK and India) and/or by strictly requiring disclosure of any paid relationships with entities whose products or services are mentioned.
Similar to publically announced crackdowns by local police on speeding or drunk driving that are aimed as much at deterrence and building awareness as collaring perps, regulators, from Australia, Canada, Hong Kong, Italy, the Emirates and the United Kingdom, teamed up early this summer for a coordinated “Global Week of Action Against Unlawful Finfluencers.” The campaign included hundreds of “take-down notices” and warnings, along with a few dozen significant enforcement actions for finfluencers running afoul of various laws and regulations in each jurisdiction.
AWOL SEC
Notably not participating in the Week of Action was the U.S. Securities and Exchange Commission. To date the Trump SEC has only officially weighed in on the finfluencer topic a few times—notably a piece by Lori Schock, Director of the Office of Investor Education and Advocacy, that mildly urges investors to use caution and fact check what they read online from finfluencers. Schock’s post is positioned as a ““Directors Take article” that “does not necessarily reflect the views of the Commission.” The article echoes previous buyer-beware warnings from the SEC under the Biden Administration.
The SEC’s Investor Advisory Committee did vote last year to recommend new rulemaking around disclosures so that “investors could therefore scrutinize finfluencer content more critically, if they are informed of the finfluencers qualifications to give investment advice regarding securities, conflicts and whether the content is paid for.” The advisory group also recommended the SEC put out guidelines for finfluencers: “The IAC believes it would be helpful and avoid violations of the law if finfluencers understood the applicability of the Federal securities laws to their activities.”
To date, however, the agency hasn’t heeded the IAC’s recommendations to add finfluencer-specific initiatives to its agenda. Instead, it appears content to continue applying existing rules around fraud and marketing to finfluencers.
That is not to say the existing U.S. regulatory framework lacks teeth when it comes to financial influencers—just ask Kim Kardashian or the folks at Robinhood about that! But financial influencers who’d rather work from the U.S. instead of relocating to the Burj Khalifa and procuring a license to finfluence might appreciate more clarity on how and when the rules apply to them.