SEBIReforms – Unified Advertising Framework Proposed for Market Intermediaries
SEBIReforms – The Securities and Exchange Board of India (SEBI) has unveiled a consultation paper proposing the introduction of a Common Advertisement Code (CAC) for several categories of regulated market participants. The move is intended to replace the existing system of separate advertising guidelines with a single, standardized framework that can be applied across different entities operating under the regulator’s oversight.
Move Towards a Single Advertising Standard
Under the proposal, the new code would cover stock brokers, depository participants, investment advisers, research analysts, portfolio managers, online bond platform providers, mutual funds, and asset management companies (AMCs). SEBI believes a unified structure will help simplify compliance requirements while ensuring that investor interests remain adequately protected.
The regulator has suggested incorporating the Common Advertisement Code into the SEBI (Intermediaries) Regulations, 2008. By bringing various entities under one advertising framework, the regulator aims to reduce overlapping requirements and create consistency in promotional communications across the financial services sector.
Change in Advertisement Approval Process
One of the most notable recommendations in the consultation paper relates to advertisement approvals. At present, certain entities are required to obtain approval before releasing advertisements. SEBI has proposed replacing this process with a reporting-based system.
If implemented, regulated entities would be allowed to publish advertisements without prior clearance, provided they submit details of the advertisement within 24 hours of its release. The regulator believes this approach can improve operational efficiency while maintaining adequate oversight.
Celebrity Endorsements May Be Permitted
The consultation paper also includes provisions related to celebrity involvement in promotions. According to the proposal, regulated entities may be allowed to engage celebrities for brand-level or organization-level advertising campaigns, subject to specified conditions and approval requirements.
This recommendation is aimed at providing greater flexibility in promotional activities while ensuring that investor-focused safeguards remain in place. Any such endorsements would still need to comply with regulatory standards designed to prevent misleading communication.
Ratings and Rankings in Advertisements
Another important aspect of the proposed framework concerns the use of ratings and rankings. SEBI has suggested allowing regulated entities to showcase ratings and rankings assigned by Past Risk and Return Verification Agencies (PaRRVA), provided prescribed safeguards are followed.
The regulator noted that such disclosures could help investors better understand distinctions among market participants while promoting greater transparency. However, the use of such information would be subject to conditions intended to ensure accuracy and fairness.
Clearer Definition of Advertisements
To address uncertainty surrounding what constitutes an advertisement, SEBI has proposed revising the existing definition. The updated framework seeks to draw a clearer distinction between promotional material and routine investor-service communications that are purely factual in nature.
The consultation paper also provides illustrative examples of communications that would not be categorized as advertisements. This clarification is expected to reduce confusion among regulated entities and support more consistent compliance practices.
Digital Reporting Platforms Under Consideration
In addition to regulatory changes, SEBI has proposed the development of digital platforms to support advertisement reporting and supervision. The proposal includes the possibility of a common reporting platform for entities monitored by multiple supervisory bodies.
According to the regulator, such technology-driven systems could improve operational efficiency, strengthen oversight capabilities, and simplify reporting obligations for market participants.
Public Feedback Invited
SEBI has invited comments and suggestions from stakeholders, industry participants, and members of the public on the proposed Common Advertisement Code. Feedback on the consultation paper can be submitted until July 14, 2026, after which the regulator will review responses before deciding on the next course of action.