SEBI proposes common advertisement code to simplify rules and strengthen investor protection

Mumbai, June 23 (IANS) 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.