The Securities and Exchange Board of India (SEBI) has introduced a Common Advertisement Code (CAC) for specified regulated entities to streamline advertising regulations. This new code aims to simplify compliance requirements and enhance investor protection. It will apply to various entities including stock brokers, investment advisers, and mutual funds.
SEBI plans to integrate this code into the SEBI (Intermediaries) Regulations of 2008. One key change suggested by SEBI is to replace the current pre-approval process for advertisements with a post-issuance reporting system. Under this system, regulated entities must report their advertisements within 24 hours of publication.
With the rise of digital communication, SEBI acknowledges the need for updated regulations. Regulated entities now engage in frequent social media posts and promotional activities, making prior approvals inefficient. SEBI has invited public feedback on these proposals until July 14 to ensure transparency and inclusivity.
In a notable move, SEBI also proposes allowing regulated entities to involve celebrities in brand promotions, with certain restrictions. Celebrities can promote brands or entities but are barred from endorsing specific investment products or services. This measure aims to prevent misleading advertisements and protect investor interests.
SEBI aims to establish a unified advertising framework that leverages technology while prioritizing investor protection. The regulator plans to replace existing entity-specific advertising codes with a single Common Advertisement Code to standardize regulations across different entities. Moreover, SEBI suggests permitting the advertisement of ratings and rankings by a Past Risk and Return Verification Agency (PaRRVA) with specified disclosures and conditions to ensure transparency and accuracy.
