SEBI Proposes Unified Advertisement Code for Brokers, Mutual Funds and Other Regulated Entities

The Securities and Exchange Board of India (SEBI) has issued a consultation paper proposing a Common Advertisement Code (CAC) for specified regulated entities, including stock brokers, depository participants, investment advisers, research analysts, online bond platform providers (OBPPs), portfolio managers, and mutual funds/asset management companies. The proposed framework aims to replace the existing fragmented advertisement regulations with a single, harmonised code under the SEBI (Intermediaries) Regulations, 2008.

One of the most significant proposals is the removal of mandatory prior approval requirements for advertisements. Instead, regulated entities would be required to report advertisements to the relevant supervisory body within 24 hours of issuance. SEBI believes the shift to a post-issuance reporting mechanism will reduce compliance burdens and better suit the fast-paced nature of digital advertising.

The regulator has also proposed allowing celebrities to promote regulated entities at the brand or entity level, subject to prescribed conditions and prior approval. However, celebrities would not be permitted to endorse specific products or services, thereby preventing undue influence on investors’ investment decisions.

To promote transparency and fair competition, SEBI has proposed permitting the use of ratings and rankings assigned by a Past Risk and Return Verification Agency (PaRRVA) in advertisements. Such rankings would be subject to disclosures regarding methodology and appropriate safeguards to prevent misleading claims.

The consultation paper further seeks to bring clarity to what constitutes an advertisement by introducing a revised definition and providing an illustrative list of communications that would not be treated as advertisements. These include certain educational, informational, investor-service and routine communications that do not carry promotional intent.

SEBI has also proposed the creation of a common digital reporting portal to facilitate advertisement reporting and monitoring. The platform, to be developed by supervisory bodies, is expected to improve operational efficiency while ensuring effective regulatory oversight.

Public comments on the consultation paper have been invited until July 14, 2026.

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