NeosLegal Featured on Dubai Eye FM’s Business Breakfast

 

Richard Dean: Okay, let’s get a bit more detail on another big business story from the past 24 hours. The UAE is introducing rules to regulate so-called finfluencers. These are people who give advice on finance on social media channels. Joining us in the studio to give us some perspective on this is the lawyer Zaainab Kamran with NeosLegal here in Dubai. Zaainab, good morning. How are you? 

Zaainab Kamran: Good morning. Thank you for having me. 

Richard Dean: Okay, first of all, let’s begin with the definition, finfluencers. What are we talking about here? 

Zaainab Kamran: So these are financial influencers. That’s where the term finfluencers comes from. And this is basically digital content creators or even traditional media content creators who go out and give financial recommendations, or they create educational content, or they’re just talking or discussing about financial products. And this is not just limited to financial products, but it also covers virtual assets, any other kind of financial services. So it’s got a very wide definition. 

Richard Dean:  Seems like an obvious question, but I’m going to ask it anyway. Why do we need to regulate them?

Zaainab Kamran: I think it’s a great move to regulate them by the SCA.It’s because it protects the end consumers, right? There’s a need. There is this need where there’s so much misinformation out there, where anyone can just pick up a phone, they record themselves, and they get 1000, 2000 followers, maybe more. Sometimes you get over 100,000 followers. And it’s very difficult for someone who’s walking out on the street to figure out whether what this person is saying is correct or not. And it’s very easy to get influenced by them, which is why I think they’re called influencers, right? 

Richard Dean: Okay, so there’s a couple of things I’m thinking of. One is simply that people may not know what they’re talking about. They could be giving a recommendation on, I don’t know, Nvidia shares that we’ve been talking about this morning or Dubai residential REAP, and they’ve got no qualifications as a financial analyst. That’s one thing, a lack of expertise. But more nefariously, they could be doing this. This could be almost fraudulent. They could be buying a stock and then tipping it. And we know that that does happen sometimes to try and make money themselves. Which ones are we seeing at the moment, Zaainab? 

Zaainab Kamran: So obviously, there’s people, like you said, in the first category as well, you know, who don’t know much about anything, or they do know some. But then I think a lot of people or a lot of influencers out there, what they do is they have either some kind of an insider thing going on where the company hires them, but then they don’t fail to disclose this information that, oh, you know, we’re actually in a collaboration or a partnership with this company, and that’s why we’re talking about them. Or again, there’s, like you said, you know, they buy the stocks, they buy a certain virtual asset, and then they go and talk about it, pump it up, and then they dump it.

Richard Dean: So how are people going to get regulated? If you look at the legislation that the Securities and Commodities Authority issued yesterday, if I’m a finfluencer, what do I have to do?

Zaainab Kamran: So the first thing is there is a list of requirements that you need to fulfil. There is a criteria you need to be, you need to fulfil. You have to be a certified financial analyst or an equivalent person.

Richard Dean:  And that’s quite a high bar. 

Zaainab Kamran: It is. But then I think that’s something that is needed, right? Because you can’t have, because something like financial advice or anything relating to finance, which people rely on, it’s a very serious thing. It needs to be regulated, I think.

Richard Dean: Well, one conversation we were having earlier on, just between us, between Tom Brandy and myself, was someone like, for example, Andrew Hallam, who is a former teacher who’s written a number of books about investing, even if you’re not earning a lot of money, such as teachers. His first book was called The Millionaire Teacher, How to Become a Millionaire on a Teacher’s Salary. He wrote a follow-up book called The Expat Millionaire, which is very popular here in the UAE. I like Andrew. I respect him. His advice seems to be fairly sound. But you could argue he is a finfluencer through his books and then social media. But he isn’t a CFA charterholder. What about people like that, Zaainab?

Zaainab Kamran: Well, they talk about their personal experience. They talk about what they’ve learned. So they have some kind of experience under their belt. What we’ve seen is people who don’t have any experience, who’ve just picked a few stocks up, especially the younger generation, we see that a lot, they don’t have any experience under their belt. They don’t know what they’re talking about. And I think in terms of this, experience plays a key part.

So it’s not just that financial education, so to speak, but it’s also the experience that comes. So if a seasoned investor is going out there and talking about it, they might still have some credibility because, you know, they’ve made mistakes, they’ve learned from it and they have something to teach, which I think is fine. 

Richard Dean: I’m just wondering who decides who that would be

Zaainab Kamran:  The Regulatory Authority decides. The Regulatory Authority. You can apply to be a finfluencer and you’ll either get approved or not. And if not, you have to shut up.

Richard Dean:   Let’s talk about crypto, because there have been a lot of finfluencers in the crypto space. But you say, actually, even before yesterday’s legislation, there’s been other regulation on finfluencers here in Dubai from VARA, the Virtual Assets Regulatory Authority. What have they done previously? 

Zaainab Kamran: So this is also fairly recent. I would say it was October 2024. VARA updated its marketing regulations. It’s a very comprehensive marketing regulations and it does cover influencers. And there are certain parameters. There is a threshold that they need to have fair communication. It needs to be transparent. If they are, again, if the company is hiring them and they’re promoting on behalf of a company, in that case, they need to disclose this. They need to have proper disclaimers. So it’s very thorough. It’s not just about influencers. It’s about generally marketing of crypto.

Richard Dean:   You do a lot of work in this space, don’t you? NeosLegal, the company you work for, you’re a lawyer there. You do a lot of work with exchanges, with people issuing coins, whatever it may be. How big an issue is this in that space? People going online and advocating for X, Y, Z coin or token or whatever it is.

Zaainab Kamran: I mean, we do see that a lot. But then I think this is where the regulations come into play. A lot of people out there, they’re just not aware the regulations are there. They’re just not aware they have to follow it. And then there comes a fine or there comes a cease and desist order, a warning letter. And then they come to us and they’re like, oh, I didn’t know I was doing anything wrong.

Richard Dean:   So the authorities are already cracking down on it.

Zaainab Kamran: They are. Of course they are.

Richard Dean:   Zaainab, great talk to you. Appreciate your time this morning. Thanks for shedding light on that. The thoughts of Zaainab Kamran there, associate with NeosLegal here in Dubai, specialising in Web3 and the crypto space.