• SEBI’s consultation paper can be accessed here.

The Securities and Exchange Board of India (SEBI) released a consultation paper on June 23, 2026. It proposes a single Common Advertisement Code (CAC) to replace the separate advertising rules that currently bind seven types of market intermediaries. Comments close on July 14, 2026. The draft drops mandatory prior approval for most ads, treats influencers and virtual characters as celebrities, and bans dark patterns.

The code covers these SEBI-regulated entities. It applies to:

• Stock brokers and depository participants.
• Investment advisers and research analysts.
• Online bond platform providers and portfolio managers.
• Mutual funds, including asset management companies.

SEBI can add more entities later. Its definition of “advertisement” is wide enough to cover print, broadcast, digital, and outdoor media, and it names podcasts, streaming services, social media, and online news sites.

Prior approval gives way to 24-hour reporting. Brokers, bond platforms, advisers, and analysts currently need sign-off before they publish an ad. SEBI wants to end that requirement.

• Entities would upload each ad or its link to a central portal within 24 hours of running it.
• Mutual funds already work this way.
• Supervisory bodies, the stock exchanges, depositories and the Association of Mutual Funds in India (AMFI) would check ads after they run and flag violations to SEBI.

An ad would therefore reach investors before any regulator has seen it. SEBI says checking ads after they run protects investors as well as clearing them first does.

Finfluencers and virtual avatars now count as celebrities. Celebrity ads still need prior approval, and SEBI has widened who qualifies. Under the draft, a person counts as a celebrity if they fall into any one of these categories:

• Featured in the top 50 of any celebrity index published by a national publication, where the index is current or at most a year old.
• Played a lead role in any mainstream film, TV serial, TV show, or OTT web series.
• An influencer with more than 5 lakh followers or subscribers on any single social media handle across platforms such as YouTube, Instagram, Facebook, or X.
• A sportsperson who has represented the national team or competed internationally in events such as the Olympics, Asian Games, Commonwealth Games, or televised sports like cricket and kabaddi.
• Hosted or anchored a TV programme, such as a quiz, cooking, comedy, dance, or news show, for at least one season or 10 episodes.
• Won or finished as runner-up in a popular TV or OTT competitive show, or advanced through its qualifying rounds.
• A virtual character, meaning a fictional avatar with lifelike human traits that influences its audience.
• Anyone the Board or supervisory body considers capable of influencing viewers of an advertisement.

This builds on the enforcement action SEBI has pursued since 2024. It barred regulated entities from working with unregistered finfluencers, then mandated that social media posts include registration IDs, and fined finfluencers such as Avadhut Sathe and Baap of Chart.

SEBI sets clear limits on what a celebrity can do:

• A celebrity can promote a regulated entity or its brand and can list the products it offers.
• A celebrity cannot make any claim about a specific product or service.
• Firms cannot pass celebrity costs on to clients or charge them to a mutual fund scheme.

Dark patterns face an outright ban. SEBI’s advertising code would, for the first time, prohibit them within this securities-market advertising framework. The draft binds any entity, including any platform, to Annexure I of the Central Consumer Protection Authority (CCPA) Dark Patterns Guidelines, 2023. A dark pattern is an interface design that tricks users into choices they did not intend. SEBI names three:

• False urgency: fake scarcity to force a quick decision.
• Forced action: making users buy more or share data to get what they came for.
• Subscription traps: hiding or complicating cancellation.

SEBI takes on a framework with a weak enforcement record. A LocalCircles audit last year found 97% of 290 major platforms still use dark patterns despite the guidelines, and CCPA fines have stayed far below the Rs 50 lakh ceiling. SEBI’s own powers, including onboarding bans, could give the ban more bite than the CCPA’s self-declaration approach has managed.

The draft goes beyond dark patterns. An ad cannot carry:

• Guaranteed, risk-free, or assured-return claims. Only Online Bond Platform Providers can promise fixed returns, and only with disclaimers.
• Testimonials, or content that runs down rival entities or makes unfair comparisons.
• SEBI or Market Infrastructure Institution (MII) logos and imagery, unless permitted.
• Incentives such as vouchers, coupons or perks that push trading, revive dormant accounts or drive app downloads.
• Indecent, vulgar, or offensive content.

Educational and routine content stays outside the code. SEBI exempts non-promotional material, as long as branding stays minimal:

• Educational material, such as explaining a systematic investment plan (SIP), with no sales pitch.
• Answers to client queries and factual product listings.
• Reports shared with existing clients.
• Recruitment notices, festive greetings, condolences, and sponsorship credits are limited to a name and logo.

An entity that funds such content from its education budget must report it.

Other notable provisions include:

• Ratings and rankings: an entity can advertise a rating or ranking only if a recognised Past Risk and Return Verification Agency (PaRRVA) issues it. PaRRVA is a SEBI-recognised body that independently verifies the risk and return figures intermediaries cite, so investors are not relying on numbers the firm calculated itself. The ad must explain what the rating means and where to find the methodology. The same PaRRVA verification applies to any past-performance claim an entity makes.
• Same-frame disclaimers: an ad citing a specific security or scheme as an example must place the disclaimer on the same page or in the same video frame, not at the end.
• Short-format messaging: SMS, push notifications, and pop-ups can carry shortened disclosures that link to the full version.
• Impersonation: an entity must act within seven days against any third party that advertises without consent and disclose the incident on its website.

SEBI would roll out the code in four steps:

• The code would sit inside the SEBI (Intermediaries) Regulations, 2008.
• Supervisory bodies would build the reporting portal, with a shared platform for entities under more than one body.
• A six-month transition applies from notification.
• Violations could draw ad withdrawals, an onboarding halt, monetary penalties, and summary proceedings.

Questions we have:

1. Does this code reach the finfluencer content that actually harms investors? The ad code applies to regulated entities, so it only catches a finfluencer when a regulated firm pays for or engages them. The unpaid influencer hyping a stock on their own account stays outside it, the same gap Meta’s ad-verification policy left open.
2. Will the educational carve-out hold up where it failed before? SEBI exempts content that teaches financial concepts. The firm in the Basant Maheshwari case fought SEBI on that very point, calling its stock videos educational to dodge the ad code. A “minimal branding” test gives entities even more room to make that argument.
3. Does keeping prior approval for celebrity ads rebuild the bottleneck SEBI just removed? The draft frees brokers from pre-clearance on routine ads, then routes every ad featuring a celebrity back through approval. With the definition now stretching to influencers, sportspersons, TV hosts, and AI avatars, that could be a large share of financial advertising. SEBI does not say how supervisory bodies would clear the volume.
4. Will post-issuance monitoring catch what prior approval would have stopped? SEBI insists later checks protect investors as well as pre-clearance does, but names no audit format, sampling method, or penalty floor for its portal. The CCPA’s dark patterns regime also relied heavily on post-facto compliance, and one audit reported 97% non-compliance, a warning about what weak post-facto oversight delivers.

SEBI accepts comments through its web form until July 14, 2026, or by email to [email protected].

Also read:

• From Double Fees to Misleading YouTube Claims: All the Ways Basant Maheshwari Firm Broke SEBI Rules
• SEBI Mandates Disclosure of Registered Names, Numbers on Social Media for Regulated Entities
• Inside SEBI’s Crackdown on Avadhut Sathe, Who Duped Investors of Rs 546 Crore Through Courses