SEBI proposes single advertising rulebook for brokers, funds and advisers

MUMBAI: India’s capital markets regulator is looking to give financial advertising a makeover. The Securities and Exchange Board of India has proposed a new, unified advertising framework that could simplify compliance for a wide range of regulated entities while maintaining investor protection standards. The proposed framework, called the Common Advertisement Code (CAC), aims to replace multiple advertising rulebooks currently applicable to stock brokers, mutual funds, portfolio managers, investment advisers, research analysts, depository participants and online bond platform providers.

The proposal marks one of the regulator’s most significant attempts to streamline advertising norms across the financial services industry.

At present, different categories of market intermediaries operate under separate advertisement guidelines issued by SEBI, stock exchanges and other supervisory bodies. The regulator believes this fragmented structure has increased compliance complexity and operational burdens. Under the new framework, a single set of rules would apply across regulated entities, creating a more harmonised approach to investor-facing communications.

One of the most notable changes is the proposed removal of mandatory prior approval requirements for advertisements. Instead of seeking approval before publication, regulated entities would be required to report advertisements within 24 hours of release. The move is designed to improve ease of doing business while retaining regulatory oversight through post-issuance monitoring.

Another headline-grabbing proposal could open the door for celebrity endorsements in the financial sector. Under the draft framework, regulated entities may engage celebrities for brand-level promotion, subject to specific conditions and prior approval requirements. The proposal stops short of unrestricted endorsements but signals a more flexible stance compared with existing restrictions.

The regulator has also proposed allowing entities to advertise ratings and rankings assigned by the Past Risk and Return Verification Agency, commonly referred to as PaRRVA. According to SEBI, this would enable firms to highlight legitimate performance distinctions while operating within clearly defined safeguards designed to protect investors from misleading claims.

A key objective of the consultation paper is to reduce ambiguity around what constitutes an advertisement. The regulator has proposed revising the definition to clearly distinguish promotional content from routine operational communications. To support this effort, the framework includes an illustrative list of communications that would not be classified as advertisements, helping firms avoid uncertainty when sharing factual information with clients and investors.

Technology also plays a central role in the proposal. SEBI wants supervisory bodies to develop digital reporting platforms, including a common reporting system for entities overseen by multiple regulators. The regulator believes a unified portal would improve operational efficiency while strengthening oversight capabilities.

The draft CAC is proposed to be incorporated into the SEBI (Intermediaries) Regulations, 2008, creating a single regulatory foundation for advertising standards across a broad segment of India’s financial services ecosystem.

The consultation paper has been released for public feedback, with comments invited until 14 July 2026. The proposals reflect SEBI’s attempt to strike a delicate balance: reducing compliance hurdles for regulated entities while ensuring investor communications remain transparent, fair and accountable.

If adopted, the framework could significantly reshape how financial firms market themselves, replacing a patchwork of regulations with a single advertising playbook designed for an increasingly digital and competitive financial marketplace.