SEBI proposes unified ad code, replacing prior approval with reporting

SEBI proposes a Common Advertisement Code to unify regulations for entities like brokers and MFs. Key changes include replacing prior ad approval with a post-issuance reporting system and allowing celebrity endorsements under specific conditions.

SEBI Proposes Unified Advertising Framework

The Securities and Exchange Board of India (SEBI) on Tuesday released a consultation paper proposing a Common Advertisement Code (CAC) for specified regulated entities, aimed at replacing multiple entity-specific advertising frameworks with a unified regulatory regime. The proposed framework would apply to stock brokers, depository participants, investment advisers, research analysts, online bond platform providers, portfolio managers, and mutual funds and asset management companies (AMCs).

According to SEBI, the Common Advertisement Code is proposed to be incorporated into the SEBI (Intermediaries) Regulations, 2008, with the objective of simplifying compliance requirements while strengthening investor protection.

Shift from Prior Approval to Post-Issuance Reporting

One of the key proposals is the replacement of the existing mandatory prior approval system for advertisements with a post-issuance reporting mechanism. Under the proposal, regulated entities would be required to report advertisements within 24 hours of issuance instead of obtaining prior clearance.

Celebrity Endorsements and Brand Promotions

The market regulator has also proposed permitting the use of celebrities for brand-level or entity-level promotions by regulated entities, subject to prescribed conditions and prior approval requirements.

SEBI said the unified code would replace existing entity-specific and exchange-specific advertisement regulations, reducing regulatory complexity and compliance burdens while ensuring a harmonised framework across regulated entities.

Use of Ratings and Rankings

The consultation paper further proposes allowing regulated entities to advertise ratings and rankings assigned by Past Risk and Return Verification Agencies (PaRRVA), subject to safeguards and prescribed conditions. The regulator said this could help entities communicate legitimate distinctions and improve transparency.

Redefining 'Advertisement'

To remove ambiguity, SEBI has proposed revising the definition of "advertisement" to clearly distinguish promotional communications from routine and factual investor-service communications. The framework also includes an illustrative list of communications that would not be treated as advertisements.

Digital Reporting and Oversight

In addition, supervisory bodies are proposed to develop digital platforms, including a common platform for entities overseen by multiple supervisory bodies, to facilitate advertisement reporting and improve regulatory oversight and operational efficiency.

SEBI has invited public and stakeholder comments on the consultation paper by July 14, 2026.

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