The Financial Supervisory Authority of Norway (Finanstilsynet) is concerned that more and more people are basing their investment decisions on information on social media. Stricter regulations are now being considered.
The number of young people in Norway that are investing in the stock market is at a record level. There are fears that new small investors and savers are uncritically following tips and advice of so-called “finfluencers” (i.e., financial influencers) on social media, the newspaper E24 writes.
The term, which is composed of the words “finance” and “influences,” has recently been used to refer to people with many followers on social media who post tips related to personal investments.
“I have expressed concern before, and it has now been reinforced,” the second deputy chair of the justice committee, Peter Frølich (H), noted on Saturday.
A new phenomenon
“Both influencers and financial advisers are subject to regulations. Now we have to review the regulation of ‘finfluencers,’ which is a completely new phenomenon. We must close any gaps and gray areas in the regulations,” he said.
Finanstilsynet is concerned that more people are basing their investment decisions on campaigns on social media, which contain misleading or false information, acting supervisory director Ann Viljugrein stated.
She pointed out that finfluencers are subject to the Marketing Act and that the Norwegian Consumer Agency has the responsibility in this area.
“Advice on investments in financial instruments on a commercial basis can only be provided by investment firms in accordance with specified rules in the Securities Trading Act,” she warned.
Source: © NTB Scanpix / #Norway Today / #NorwayTodayFinance
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