SEBI proposes common advertisement code for regulated entities; Seeks public comments till July 14
Mumbai, June 24
The Securities and Exchange Board of India on Tuesday released a consultation paper proposing a Common Advertisement Code for specified regulated entities, aimed at replacing multiple entity-specific advertising frameworks with a unified regulatory regime.
The proposed framework would apply to stock brokers, depository participants, investment advisers, research analysts, online bond platform providers, portfolio managers, and mutual funds and asset management companies (AMCs).
According to SEBI, the Common Advertisement Code is proposed to be incorporated into the SEBI (Intermediaries) Regulations, 2008, with the objective of simplifying compliance requirements while strengthening investor protection.
One of the key proposals is the replacement of the existing mandatory prior approval system for advertisements with a post-issuance reporting mechanism. Under the proposal, regulated entities would be required to report advertisements within 24 hours of issuance instead of obtaining prior clearance.
The market regulator has also proposed permitting the use of celebrities for brand-level or entity-level promotions by regulated entities, subject to prescribed conditions and prior approval requirements.
SEBI said the unified code would replace existing entity-specific and exchange-specific advertisement regulations, reducing regulatory complexity and compliance burdens while ensuring a harmonised framework across regulated entities.
The consultation paper further proposes allowing regulated entities to advertise ratings and rankings assigned by Past Risk and Return Verification Agencies (PaRRVA), subject to safeguards and prescribed conditions. The regulator said this could help entities communicate legitimate distinctions and improve transparency.
To remove ambiguity, SEBI has proposed revising the definition of "advertisement" to clearly distinguish promotional communications from routine and factual investor-service communications. The framework also includes an illustrative list of communications that would not be treated as advertisements.
In addition, supervisory bodies are proposed to develop digital platforms, including a common platform for entities overseen by multiple supervisory bodies, to facilitate advertisement reporting and improve regulatory oversight and operational efficiency.
SEBI has invited public and stakeholder comments on the consultation paper by July 14, 2026.
— ANI
Reader Comments
Finally, some common sense! Having different ad rules for each type of entity was confusing even for us mutual fund investors. As a retail investor, I want clear, honest ads—not hidden risks. The revised definition of 'advertisement' to exclude routine communications is also welcome. SEBI should also set fines for violations upfront. Public comment deadline is July 14—hopefully, they listen.
Interesting approach. As someone working in finance, the current multiple frameworks are a compliance nightmare. A common code is long overdue. However, I'm cautious about PaRRVA ratings being used in ads—these can be gamed. Also, the 24-hour reporting mechanism might be okay for large firms but small advisors could struggle. Good that SEBI is seeking public input.
Really hope SEBI doesn't go soft on celebrity endorsements just to make ads flashy. Remember the crypto and binary options ads? I've seen too many people misled by famous faces promoting risky investments. At least they want prior approval for celeb promos, so that's something. The unified code sounds good in principle—let's see if enforcement matches intent.
Common code is great, but will it apply to small fintech startups too? As a small investor, I want to see if the post-issuance reporting will actually catch misleading ads before they reach me. The digital platform idea for reporting is good—could reduce paperwork. But stricter penalties for false claims are still needed. SEBI should also ensure regional language ads are covered.
A rational move from SEBI.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.