The Australian Securities and Investments Commission (ASIC) confirmed its review of some “finfluencers” in an answer to a question on notice from a recent hearing on the oversight of ASIC,which asked whether the regulator was undertaking any compliance action or overview of TikTok financial influencers.
“We are currently undertaking a review of selected financial influencers (‘finfluencers’) to understand their business models and how the financial services law applies to this activity.
“Our selection of finfluencers is not targeted specifically at TikTok,although it is being included in the review as we note that some of the finfluencers have a presence on TikTok.”
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ASIC has been grappling with the huge increase in “youth” investors as low-cost online trading platforms increase access to markets,at a time when stock markets around the world and other assets like cryptocurrencies are booming.
Last year,an army of younger investors in the US banded together on news aggregation and discussion site Reddit to drive up the price of GameStop to ‘squeeze’ the hedge funds that were betting on the share price of the company going down.
The flurry of investing activity by younger traders has led to a dramatic increase in the number of social media influencers seeking to promote themselves along with their favourite stocks and types of investments products.