The Securities and Exchange Board of India (SEBI) on Tuesday released a consultation paper proposing a Common Advertisement Code (CAC) for specified regulated entities, aiming to replace multiple entity-specific advertising frameworks with a unified regulatory regime. Public comments are invited until July 14, 2026.
Scope of the Proposed Code
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 CAC is intended to be incorporated into the SEBI (Intermediaries) Regulations, 2008, with the objective of simplifying compliance requirements while strengthening investor protection.
Key Changes: 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. This change is expected to reduce delays and administrative burdens.
Celebrity Endorsements and Ratings Advertising
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. Additionally, the consultation paper proposes allowing regulated entities to advertise ratings and rankings assigned by Past Risk and Return Verification Agencies (PaRRVA), subject to safeguards and prescribed conditions. SEBI stated that this could help entities communicate legitimate distinctions and improve transparency.
Unified Code to Replace Existing Frameworks
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. This consolidation is expected to benefit both regulators and market participants.
Revised Definition of 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, such as standard account statements or regulatory disclosures.
Digital Platforms for Reporting
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. This move aligns with SEBI's broader push towards digitalisation and ease of doing business.
SEBI has invited public and stakeholder comments on the consultation paper by July 14, 2026. The consultation paper is available on SEBI's official website for review and feedback.
