Currently, various entities registered with Securities and Exchange Board of India (“SEBI”) such as stock brokers, Investment Advisers (“IAs”), Research Analysts (“RAs”), Online Bond Platform Providers (“OBPPs”), portfolio managers and Mutual Funds (“MFs”) including Asset Management Companies (“AMCs”) (jointly referred to as “Specified Regulated Entities”) are governed by varying advertisement frameworks.
To bring across uniformity, and based on industry feedback, SEBI has issued a consultation paper on ‘Common Advertisement Code for Specified SEBI Regulated Entities’ dated June 23, 2026 (“Consultation Paper”), proposing to consolidate the fragmented advertisement regulatory framework applicable to various SEBI regulated entities into a single, Common Advertisement Code (“CAC”), which would be incorporated in the SEBI (Intermediaries) Regulations, 2008 (“Intermediaries Regulations”). The proposals are elaborated below.
PROPOSALS THROUGH THE CONSULTATION PAPER
A. Common Advertisement Code
(i) Interpretation and Oversight
The proposed CAC redefines key terms and clarifies the scope of terms such as ‘advertisement’ and ‘celebrity’. Further, it prescribes supervisory bodies for different regulated entities, such as stock exchanges for stock brokers and OBPPs.
(ii) Celebrity Endorsement
Currently, celebrity endorsements are prohibited for stock brokers, IAs, RAs, and OBPPs. For MFs, celebrity endorsements are permitted at the industry level subject to prior approval from SEBI in terms of the Fifth Schedule of the SEBI (Mutual Funds) Regulations, 2026.
SEBI has proposed to permit all Specified Regulated Entities to engage celebrities for promotion at the brand or entity name, subject to prescribed conditions. However, celebrities cannot promote a specific product or service.
Prior approval from the relevant supervisory body, or from SEBI directly where no supervisory body is specified, is proposed to be retained for all celebrity advertisements. With regards to MFs, the endorsement expenses shall not be passed on to the clients/charged to the scheme of mutual fund.
(iii) Removal of Mandatory Prior Approval
Currently, all SEBI intermediaries, except mutual funds and portfolio managers are required to obtain prior approval from the relevant stock exchange before issuance of any advertisement pursuant to exchange circulars.
SEBI has proposed to replace the mandatory prior approval requirement with a post-issuance reporting model. Under the proposed framework, Specified Regulated Entities shall upload advertisements to a centralised portal provided by the relevant supervisory body within twenty-four hours of the issuance of such advertisement. Celebrity endorsements are the sole category for which prior approval is proposed to be retained.
(iv) Use of Ratings and Rankings in Advertisements
Currently, the use of ratings and rankings in advertisements is prohibited across all Specified Regulated Entity categories, with the exception of IAs, RAs, and stock brokers in respect of past performance metrics verified by the Past Risk and Return Verification Agency (“PaRRVA”) pursuant to the respective master circulars and exchange circulars.
SEBI proposes to permit all Specified Regulated Entities to use ratings or rankings in their advertisements, provided they are assigned by PaRRVA.
Such use is subject to conditions requiring: (a) adequate explanation of the ratings or rankings methodology, either in the advertisement itself or by reference to the PaRRVA website or the regulated entity's website; (b) a disclaimer that the rating or ranking is only one factor to be taken into account when deciding whether to avail the services of the regulated entity; and (c) that the rating or ranking must emanate from a PaRRVA study or survey covering all relevant market participants within the concerned category.
(v) Disclosures
Mandatory Disclosures
The CAC proposes to prescribe a uniform mandatory disclosure standard applicable to all Specified Regulated Entities. These disclosures include the name of the regulated entity, SEBI registration number, and entity logo (if any). Further, disclaimers as may be specified by SEBI from time to time must be displayed or communicated in the prescribed manner.
Abbreviated Disclosures for Short-Format Messaging
Under the current frameworks, a comprehensive set of disclaimers is required in every advertisement across all entity categories.
SEBI has proposed that for short format messaging such as SMS/Pop-ups, push notifications or any other similar concise electronic communication, with inherent space/time constraints, a hyperlink to such details and disclaimers available on the official website of the regulated entity must be provided.
(vi) Exemption to Certain Forms of Communication from the Proposed Framework
Under the existing frameworks, there exists ambiguity as to whether general financial literacy content, constitutes an “advertisement”.
SEBI has proposed to clarify that the content that is purely educational or investor-awareness oriented and, carries no promotional intent for products or services of regulated entity shall not be subject to the proposed CAC. The CAC further provides a detailed illustrative list of communications not to be treated as advertisements, provided they contain no promotional, persuasive, or solicitation-oriented content.
(vii) Prohibitions Against Engaging in Dark Pattern
As existing advertisement codes do not contain any express prohibition on the use of dark patterns, SEBI has proposed that the CAC framework would contain an explicit prohibition on usage of dark patterns by Specified Regulated Entities as specified in Annexure I of the Guidelines for Prevention and Regulation of Dark Patterns, 2023 issued by the Central Consumer Protection Authority.
(viii) Third-Party Advertisements
The CAC proposes that where an advertisement is issued without the regulated entity's consent, the entity must: (a) initiate appropriate action, including legal action, within seven days of becoming aware of the same; (b) inform the supervisory body of the action taken and its outcome; and (c) prominently disclose on its official website the details of such incidents, including the identity of the third party and the actions taken against them.
B. Implementation Architecture
The CAC is proposed to be incorporated through amendments to the Intermediaries Regulations, entity-specific regulations, and operational circulars. Specified Regulated Entities will be granted a transitional period of six months or such period as may be specified from the date of the official SEBI notification of the CAC, to align with the new framework.
(i) Reporting Portal
SEBI has proposed that supervisory bodies will develop a digital, centralised advertisement reporting portal where entities must upload their advertisements or alternatively, provide direct links no later than 24 hours post-issuance. For entities governed by multiple supervisory bodies, a shared, common platform will be established to streamline submissions.
(ii) Approval Process for Advertisements Involving Celebrity
Supervisory bodies must establish dedicated pre-approval systems for brand advertisements featuring celebrities, which may be integrated directly into the central advertisement-reporting portal. These systems should be equipped to provide regulated entities with application tracking, receipt acknowledgments, and query or grievance support throughout the approval process.
(iii) Monitoring and Enforcement
SEBI has proposed to shift from the prior approval model to a post-issuance reporting model, where the concerned authority shall conduct post-issuance monitoring of advertisements reported by Specified Regulated Entities, in accordance with the policy specified by SEBI or the supervisory body. Supervisory bodies are required to develop centralised digital advertisement reporting portals, and a separate approval system for celebrity endorsements. For entities having multiple registrations, a common platform would be developed.
Enforcement actions available to SEBI for non-compliance include summary proceedings under the Intermediaries Regulations, directions to withdraw advertisements, restrictions on onboarding new clients, and imposition of monetary penalties.
CONCLUSION
For a long time, intermediaries have faced an uneven compliance landscape which created compliance burdens, and were ineffective protecting investors from misleading advertisements. Ambiguities in the definition of 'advertisement', an outdated prior-approval model, and duplicative approval requirements for entities with multiple registrations collectively rendered the framework misaligned with current market realities.
Through the CAC, SEBI proposes to rationalise a structurally fragmented advertisement regulatory landscape by consolidating entity-specific and exchange-specific codes into a single, uniformly applicable instrument.
Stakeholders have until July 14, 2026 to provide feedback on this proposal.
