Staff Reporters
Nov 9, 2021

China bans influencers from touting stocks for brokerages

Only KOLs who are licensed brokers will be allowed to be continue, while livestreaming investment recommendations will be banned, media outlets have reported.

China bans influencers from touting stocks for brokerages

Chinese regulators are cracking down on increased activity in promoting stocks through influencers and livestreaming. In a notice seen by Bloomberg and reported in Caixin, the China Securities Regulatory Commission (CSRC) has informed securities firms they can no long hire social-media influencers to attract clients in what has become an increasingly popular method of gaining new sales, unless those KOLs are licensed brokers. 

The same notice also said the practice of giving investment recommendations via livestreaming would be banned.  

According to Bloomberg's report, the CSRC required brokerages and their staff to be objective and professional in their economic and market commentaries during webcasts, without aiming to attract undue attention through “sensational wording” or "quirky outfits".  Market analysts were encouraged to focus more on macroeconomic analysis and overall market conditions in their online commentaries, Caixin reports. 

The move by regulators follows recent crackdowns on China's fintech and internet industries, but is far from a Chinese issue. The influence of social media in manipulating markets has been well documented and continues to be debated in the US, for example, with one report describing how some key influencers make more money promoting investments than the bankers themselves.

Source:
Campaign Asia

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