SEBI: Common Advertisement Code sets celebrity ad limits

The Securities and Exchange Board of India (SEBI) has notified a Common Advertisement Code that allows celebrities to promote regulated firms at the brand level but bars inducements or claims about specific products or services. Its Securities and Exchange Board of India (Intermediaries) (Second Amendment) Regulations, 2026, dated 8 October 2026, also prohibit firms from passing celebrity endorsement costs to clients or charging them to mutual fund schemes.

The amendment says the rules will take effect on the 180th day from publication in the Official Gazette, rather than immediately on notification. The National Stock Exchange of India circulated the notification to trading members on 13 October 2026 through compliance circular NSE/COMP/76890. That circulation was a subsequent communication to members, not the commencement of the code.

SEBI’s notification, numbered SEBI/LAD-NRO/GN/2026/323, inserts Chapter IIID into the Intermediaries Regulations, 2008. It sets requirements for advertising content, disclosures, celebrity appearances and responses to advertisements issued without a firm’s consent.

Firms and communications covered

SEBI’s code covers stock brokers, depository participants, online bond platform providers, investment advisers, research analysts, mutual funds, asset management companies and portfolio managers. It also allows SEBI to specify additional entities. The provisions apply to their advertisements concerning products or services under the regulator’s purview.

The notification defines advertising broadly. It includes communications issued directly or indirectly by, or on behalf of, a regulated entity to promote its products, services, brand or business. Written, audio, visual and verbal communications can all qualify. The listed channels include newspapers, television, radio, podcasts, websites, social media, streaming services and outdoor displays.

The code identifies supervisory bodies responsible for the different categories of firms. Stock exchanges supervise brokers and online bond platform providers, while depositories supervise depository participants. Investment advisers and research analysts fall under their respective administration and supervisory bodies. The Association of Mutual Funds in India is named for mutual funds and asset management companies, and the Association of Portfolio Managers in India for portfolio managers.

Celebrity promotion stops short of product claims

Under Regulation 16K, SEBI permits celebrity endorsements at the brand or entity level. An advertisement may name a firm’s products or services, but it cannot include a direct or indirect inducement or claim concerning a specific product or service. Naming an offering and making a promotional claim about it are therefore treated differently.

Any advertisement featuring a celebrity will require prior approval from the relevant supervisory body. Where SEBI has not specified such a body for the entity, approval must come from SEBI itself. These advertisements must also carry the prescribed disclaimers.

The definition of celebrity extends beyond film actors. SEBI includes specified television personalities, sportspersons, influencers whose following exceeds the threshold in applicable Advertising Standards Council of India guidelines, and virtual influencers – computer-generated characters with human-like features that influence their audience.

Other qualifying categories include people in the top 50 of a reputable national publication’s latest available celebrity index, which must be no more than one year old. Television hosts or anchors qualify if they have appeared for at least one season or a minimum of 10 episodes. SEBI or the supervisory body may also identify someone capable of influencing viewers’ opinions.

The notification makes an exception for a regulated entity’s founder, promoter, director, key managerial personnel or senior management personnel appearing in that entity’s advertisement. Such individuals are excluded from the celebrity definition for that appearance.

Education is excluded only while it remains non-promotional

Regulation 16J distinguishes advertising from specified informational communications. SEBI excludes financial education or training material where branding is minimal and incidental, and the content contains no promotional call to action or attempt to induce a purchase of a particular product or service.

Where firms use funds earmarked for education and awareness to pay for such communications, they must report the material to the supervisory body or SEBI for monitoring after issuance. The educational exclusion therefore does not remove that reporting requirement.

Other exclusions include factual product lists, essential regulatory communications to existing clients, replies to requests for product information, and research reports shared with existing clients or investors that contain no claims about the regulated entity’s performance. Product demonstrations, including webinars and interface walkthroughs, are excluded only if they do not promote products or solicit interest in using the firm’s offerings.

The notification also excludes specified recruitment notices, customer feedback surveys and sponsorship communications limited to generic information about the sponsor. But it supplies an overriding test: a communication that promotes products or services, or solicits interest in them, is an advertisement. The exclusions depend on the content and purpose of the communication, not simply its format.

Disclosures must accompany the message

SEBI requires advertisements to carry the regulated entity’s name, SEBI registration number and logo, if any, alongside applicable disclaimers. Regulation 16I provides a limited alternative for short electronic messages, such as SMS, pop-ups and push notifications. Where character limits prevent inclusion of the details and disclaimers, the message must link to them on the entity’s official website.

The code also addresses where information appears. If an advertisement displays particular securities or schemes as examples, a disclaimer explaining that they are examples rather than recommendations must appear on the same page or video frame. Placing it only at the end is not sufficient. Statistical data, graphs and charts must show their sources alongside them and identify the relevant date or period.

Under Regulation 16L, advertisements must be truthful, fair, accurate, complete and unambiguous. SEBI prohibits presentation that disguises the significance of a statement or exploits investors’ lack of knowledge or experience. Excessive technical terminology, complex language and unnecessary detail must not mislead or confuse investors.

The notification also bars incentives such as vouchers, coupons, tokens or subscription plans used to induce clients to trade, use services, reactivate inactive accounts, invest in schemes or download mobile applications. Suspended entities must not advertise during their suspension, either alone or jointly with another regulated entity.

Responsibility for unauthorised advertisements

Regulation 16M requires firms to refrain from using the dark patterns specified in the Central Consumer Protection Authority’s Guidelines for Prevention and Regulation of Dark Patterns, 2023. DPNC Global’s explanatory note identifies examples including false urgency, disguised advertisements and subscription traps – practices involving misleading pressure or obstacles in a user’s interaction with a service.

The code also imposes duties when a third party advertises without a regulated entity’s consent. Under Regulation 16L, the entity must initiate appropriate action, including legal action, within seven days of learning about the advertisement, while informing its supervisory body. It must report the action and its outcome to that body and prominently disclose the incident, the third party’s details and the action taken on its website.