Meta Cracks Down: SEBI Verification Now Mandatory for Investment Ads

In a significant crackdown on fraudulent market consultants and investment gurus, or "furus", Meta has required advertiser authentication for all securities and investment-related advertisements that target Indian consumers beginning on July 31.

All advertisers running investment ads in India, including international campaigns targeting Indian audiences, must confirm the person or entity benefiting from and paying for the ad by providing valid SEBI registration details, according to updated terms of service announced on June 26 by Meta.

This comprises the name of the company, its SEBI registration number, and its registered phone number and email address. For authentication, Meta will supply the specified contact with a verification code.

Along with unique disclaimers made during ad setting, the SEBI registration number, organisation name, and location would be shown publicly on the advertisement as payer and beneficiary.

Advertisers to Get One Month to Complete Verification

According to Meta, advertising professionals will have at least a month to finish the screening procedure, and by July 28, the feature should be completely operational.

As long as the advertiser account is validated, ads that were active before July 31 do not require editing. In an effort to improve transparency and prevent fraud by dishonest influencers, the capital market regulator partnered with digital platforms to verify financial advisors earlier this year after much consideration and a thorough consultation process.

Meta has established alternative verification mechanisms for individuals who seek exemption from regulator registration, such as financial instructors or trainers.

Organisations must upload pertinent business documents, and individuals must present at least one government-issued ID. The advertisements will continue to reveal the confirmed identity.

Ads that Don’t Require Verification  

Ads pertaining to training, talent development, or financial education might not need SEBI verification, Meta explained. Cyber law expert counsel (Dr) Prashant Mali said that Meta's verification of SEBI credentials was long overdue and that Google should do the same for its YouTube channel.

In actuality, META and Google, with SEBI's assistance, must immediately eliminate all prior shorts, reels, and videos that violate SEBI regulations and ultimately mislead investors. This verification was something that Dr Mali was always pushing for.

The action comes after a news release issued by SEBI on March 21 requesting that all intermediaries registered with the agency that advertise on social media platforms submit their verified contact information with the agency.

A surge in securities-related scams on websites like YouTube, Facebook, Instagram, WhatsApp, X (formerly Twitter), Telegram, Google Play Store, and Apple App Store was noted by the regulator.

According to Meta, the policy's objectives are to improve customer safety, stop fraud and impersonation, and maybe expand such regulations to other financial product categories in the future.