Discover CySEC’s new Protection Initiative, empowering investors against misleading social media advice and promoting financial literacy.
The Cyprus Securities and Exchange Commission (CySEC) has launched a comprehensive investor protection initiative aimed at addressing the growing influence of social media and financial influencers—commonly referred to as “finfluencers”—on financial markets. This initiative includes the issuance of a formal warning, the introduction of an Investor’s Guide, and a series of informative posts across social media platforms to enhance public awareness and protect investors.
Today, CySEC issued a reminder to individuals and entities that offer financial advice or commentary through media channels, including social media, that they may be in violation of the EU Market Abuse Regulation. The regulator emphasizes that firms collaborating with finfluencers must take greater responsibility for how their financial promotions are communicated. CySEC expects that any recommendations or information regarding investments are presented clearly and neutrally, with full disclosure of any potential conflicts of interest. Furthermore, those operating as financial influencers must adhere to the regulatory standards governing investment advice.
To bolster its financial literacy efforts, CySEC has released an Investor’s Guide titled “Unveiling the World of Finfluencers,” designed to empower investors to critically assess the financial content they encounter online. This guide explains the operational dynamics of finfluencers and outlines the risks associated with heeding the advice of unregulated advisors on social media.
Many investors have experienced significant losses, incurred substantial debts, or fallen victim to fraudulent schemes as a result of misleading financial advice.
In launching this campaign, CySEC Chairman Dr. George Theocharidis stated:
“Social media plays a pivotal role in the marketing strategies of various companies, leading to a surge of advice and promotions from celebrities, athletes, and even individuals lacking formal investment knowledge.”
“Regrettably, the widespread absence of financial education coupled with the rise of digital platforms has allowed finfluencers to exploit a void, increasing the risk of poor investment choices. While there are credible sources of investment information online, much of the content can mislead and endanger investors.”
“This campaign serves as a cautionary reminder for the investing public to critically evaluate the advice they receive from influencers and to be wary of their underlying motivations. We also expect regulated firms utilizing this marketing approach to assume greater accountability for their promotions, ensuring they are not misleading and fully compliant with regulations. CySEC has implemented monitoring tools to identify online promotions and advertisements that violate the rules. As a regulatory body, we will not tolerate companies that disseminate misinformation—whether directly or indirectly—or that urge individuals to invest without adequately explaining the associated risks.”
For further information and educational resources, please visit the Financial Education Hub on the CySEC website.
