Finfluencers

Who is a finfluencer?

We consider a finfluencer to be someone who creates online content (such as through various social media platforms, online blogs, or message boards) to offer advice, tips, and guidance on how to manage money, invest, and achieve financial goals. They may create content on other topics as well as investing.

Finfluencers can play a positive role in providing general financial advice and investor education. They raise awareness about the importance of investing, popularize financial topics, and provide retail investors with easily accessible and helpful information about investing. Finfluencers can have an impact on their audience’s financial future.

Finfluencers may be engaged in activity regulated by securities laws and must follow the guidance.

Resources for
finfluencers
resources for
investors
working with
finfluencers

What the law says

This section describes at a high-level the securities laws most likely to apply to finfluencer activities. It is not an exhaustive inventory of all securities law requirements applicable to finfluencers.

Securities laws can extend to finfluencer activity regardless of whether it is conducted through video, online postings, text messages, television, print or other means, and regardless of whether the finfluencer is a real person or is a computer-generated digital avatar (also referred to as a digital influencer). The same principles apply to the use of artificial intelligence (AI).

Requirement to register

One of the principal ways securities laws seek to protect investors is by requiring the registration of individuals and firms who encourage others to rely on them for “advice” about investing in securities or for “trading” securities.

  • “Advice” includes offering an opinion about the merits of investing in a business or its securities or making a recommendation about an investment in a business or its securities. Note that the use of certain emojis or promotional language such as “not to be missed” and “golden opportunity” could be perceived as investment recommendations. Advising does not include providing purely factual information (e.g., how securities markets work, investing basics, etc.).
  • “Trading” is defined broadly in securities law and captures the process of fulfilling a buy or sell order (i.e., trade execution services such as those offered by registered dealers), and also “any act, advertisement, solicitation, conduct or negotiation directly or indirectly in furtherance of” a sale of a security. This could include activities such as facilitating “copy trading” by linking others who pay a subscription fee to replicate your trades to a self-directed / do-it-yourself (DIY) trading account.

Marketing, promotion, and similar activities

If a finfluencer receives any form of payment to market the services of a registered dealer or registered adviser they may be entering into a “referral arrangement” subject to requirements set out in securities law. Before entering into arrangements of this kind, finfluencers should take care to ensure that they are dealing with someone who is registered and who has taken the appropriate steps to document the arrangement, as discussed in the guidance for registered firms working with finfluencers.

Illegal activity

If the general advice exemption is available, a finfluencer may not need to be registered as an adviser under securities law. However, this does not mean that other provisions and prohibitions in securities law will not apply to the finfluencer.

  • Misrepresentations. Securities laws prohibit misrepresentations, such as statements that the person or company making them knows or reasonably ought to know are untrue or misleading concerning a fact or omission that is likely to affect a decision of a reasonable investor or would reasonably be expected to have a significant effect on the market price or value of a security.
  • Market manipulation. Securities laws prohibit manipulative or deceptive trading. This includes activities that may create misleading pricing or trading activity that is harmful to investors and the integrity of the markets. For example, “pump-and-dump” schemes, which involve buying shares at a low price and then taking action to artificially drive up the price, such as by making false or misleading statements about the security, in order to later sell at a profit. Finfluencers should be careful not to get tricked into working with fraudsters or others who might be engaging in market manipulation, even inadvertently.

Examples of securities law applied to finfluencer activity

These case studies are designed to help you understand how securities laws apply to finfluencer activities. There are many other possible examples. Click here to view the case studies.

Resources for finfluencers

Here’s a list of resources to help you navigate securities legislation:

Resources for investors

Here’s a list of resources to help you in your investing journey:

Working with finfluencers

Here’s a list of resources to help firms engaging the services of finfluencers:

Regulatory oversight

Securities regulators, in cooperation with domestic and international partners, monitor finfluencers’ online activities for potential breaches of securities laws. Where concerns are identified, we will seek to protect the public interest by employing a range of tools to respond proportionately to non-compliance with securities laws. Among other potential consequences, this may lead to regulatory action, including enforcement proceedings before an administrative tribunal.