Mumbai, The Securities and Exchange Board of India (SEBI) on Tuesday proposed a Common Advertisement Code (CAC) for specified regulated entities, seeking to replace multiple advertising frameworks with a single, harmonised set of rules aimed at reducing compliance burdens while enhancing investor protection.
The proposed code would apply to stock brokers, depository participants, investment advisers, research analysts, online bond platform providers, portfolio managers, and mutual funds and asset management companies.
SEBI plans to incorporate the new framework into the SEBI (Intermediaries) Regulations, 2008.
As part of the proposed changes, the market regulator has suggested replacing the existing requirement of obtaining prior approval for advertisements with a post-issuance reporting mechanism. Under the new system, regulated entities would be required to report advertisements within 24 hours of publication rather than seeking approval beforehand.
SEBI said that the rapid growth of digital communication has significantly changed the way regulated entities interact with investors. According to the regulator, firms now publish numerous social media posts, educational videos, reels, and promotional content on a daily basis, making prior approval for every communication both inefficient and impractical.
The regulator has invited public comments on the proposals until July 14.
In another significant proposal, SEBI has suggested permitting regulated entities to engage celebrities for brand or entity-level promotions, subject to specified conditions. However, celebrities would not be allowed to endorse specific investment products or services, a move aimed at preventing misleading promotions and safeguarding investor interests.
SEBI said the proposed framework is intended to create a unified and technology-enabled advertising regime that balances ease of doing business with strong investor protection measures.
The regulator has also proposed replacing all existing entity-specific and exchange-specific advertisement codes with a single Common Advertisement Code, which would establish uniform standards across regulated entities and reduce regulatory complexity.
Additionally, SEBI has proposed allowing regulated entities to advertise ratings and rankings assigned by a Past Risk and Return Verification Agency (PaRRVA), subject to prescribed disclosures and conditions. The proposal is aimed at enabling entities to communicate legitimate distinctions and performance credentials while maintaining adequate safeguards against misleading claims.
