SEBI Wants One Ad Code for All of Finance. Celebrities Are Back In, Finfluencers Are Now On the Hook.
SEBI has proposed a single Common Advertisement Code to replace the patchwork of rules that govern how financial entities advertise. It scraps mandatory prior approval for most ads, lets firms use celebrities again, and classifies big finfluencers, OTT stars, and even AI avatars as "celebrities."
India's market regulator wants every financial firm that advertises to follow the same rulebook.
In a consultation paper released on 23 June 2026, the Securities and Exchange Board of India (SEBI) proposed a Common Advertisement Code (CAC) that would replace the separate, entity-by-entity advertising rules currently governing mutual funds, stockbrokers, investment advisers, research analysts and others. Public comments are open until 14 July 2026, with a six-month transition planned after notification.
The proposal pulls in two directions at once, and that is what makes it worth reading closely. It loosens rules the industry has long called restrictive, and it tightens others, particularly around who counts as a celebrity and what an advertisement even is.
The Proposal at a Glance
| What | A Common Advertisement Code (CAC) to replace separate, entity-wise ad rules |
| Released | 23 June 2026 (consultation paper) |
| Comments open until | 14 July 2026 |
| Transition | Six months from the date of notification |
| To be folded into | SEBI (Intermediaries) Regulations, 2008 |
| Biggest shift | Mandatory prior approval replaced by post-issuance reporting within 24 hours for most ads |
| On celebrities | Allowed again at brand/entity level (with prior approval); banned for specific products |
| New | Big finfluencers, OTT actors, reality-TV names and AI avatars now count as "celebrities" |
One Code Instead of Many
Today, a financial firm's advertising rules depend on what kind of firm it is. Mutual funds follow one code, investment advisers and research analysts follow another (from an April 2023 circular), brokers follow their exchanges' norms, and so on. The result is a patchwork: similar ads judged by different standards, duplicated compliance, and gaps between regimes.
The CAC would collapse that patchwork into a single code applying to a defined set of regulated entities:
- Stock brokers
- Depository participants
- Investment advisers
- Research analysts
- Online bond platform providers
- Portfolio managers
- Mutual funds and asset management companies (AMCs)
SEBI's stated aims are to simplify compliance, lower its cost, create uniform standards on disclosures, risk warnings and banned claims, and strengthen investor protection through technology-based monitoring rather than manual pre-vetting.
The Biggest Change: Prior Approval Out, 24-Hour Reporting In
The headline operational shift is a move from permission to accountability after the fact.
Right now, many regulated entities must get advertisements pre-approved before they run. The CAC would scrap that for most ads. Instead, a firm would report the advertisement, or a link to it, to its supervisory body within 24 hours of publication, uploading to a centralised reporting portal.
To make this work, SEBI proposes that supervisory bodies build digital reporting platforms, including a common platform for entities that answer to more than one supervisor. The bet is that automated, post-issuance surveillance can police a far larger volume of advertising than a manual approval queue ever could.
There is one important exception. Celebrity-endorsed advertisements would still need prior approval. SEBI is loosening the gate for ordinary ads while keeping it shut for the highest-risk format.
Celebrities Return, but the Definition Just Got Much Wider
This is the part the marketing industry will argue over.
For years, the use of celebrities to push specific financial products was effectively off-limits. The CAC proposes to permit celebrity endorsements again, but only at the brand or entity level, and only with prior approval. A fund house could put a film star in a campaign for the house. It could not use that star to sell a particular scheme, strategy or product. SEBI's reasoning is that product-level endorsements can disproportionately sway individual investor decisions.
The catch is in the definition. SEBI proposes a much broader meaning of "celebrity" than the usual film-and-cricket roster:
| Now counts as a "celebrity" | Threshold / scope |
|---|---|
| Social media influencers | More than 5 lakh followers or subscribers on a single handle |
| OTT performers | Lead or co-lead roles in prominent shows or web series |
| Reality-TV personalities | Winners, runners-up or anchors of popular competitive reality shows |
| Virtual / AI personas | AI-generated digital characters or human-like avatars with influence over followers |
Two things stand out. First, by setting a 5 lakh-follower line, SEBI sweeps large finfluencers into the same endorsement rules as movie stars. They could front a brand campaign with approval, but not endorse a product. Second, the explicit inclusion of AI-generated avatars and virtual influencers is forward-looking, and rare for any regulator. It closes a loophole before the industry can fully open it.
Tripti Agarwal
What the Code Bans and What It Now Allows
Alongside the new structure, the CAC sets common red lines and one notable green light.
Prohibited across the board:
- Dark patterns in digital communications (manipulative design that nudges investors)
- Guaranteed or assured returns and misleading performance claims
- Unfair comparisons with other entities or products
- Misuse of SEBI's name or logo to imply endorsement
Newly allowed, with safeguards:
- Advertising ratings and rankings verified by a Past Risk and Return Verification Agency (PaRRVA), so firms can communicate legitimate distinctions without inflating their record.
SEBI also proposes revising the definition of "advertisement" itself, to separate genuine promotion from routine, factual investor-service communications, with an illustrative list of what would not count as an ad. That matters: it decides what falls inside the 24-hour reporting net in the first place.
Why SEBI Is Doing This Now
The CAC is the logical next step in a multi-year campaign against mis-selling. SEBI has spent the last few years tightening the link between registered entities and unregistered finfluencers, and pushing intermediaries to disclose their registration details on social media. A single advertising code, enforced by technology, extends that effort from who can promote to how everyone promotes.
It also reflects a regulator trying to keep pace with how financial products are actually marketed in 2026: on Instagram and YouTube, through reality-show tie-ins, and increasingly through synthetic personalities that never existed.
What It Means
The proposal lands differently on each part of the market.
| Who | What changes |
|---|---|
| AMCs, brokers, wealth platforms | Faster go-to-market (no pre-approval for most ads), and celebrities usable again at the brand level. The price is real-time reporting and tech-based scrutiny. |
| Finfluencers and creators | A 5 lakh following now carries regulatory weight. Brand deals with regulated firms become possible but constrained; product endorsements stay off-limits. |
| Investors | In theory, cleaner ads and fewer manipulative tactics. The open question is whether after-the-fact reporting catches misleading ads as well as pre-approval did. |
That last point is the real trade-off. SEBI is swapping a slow gate for fast surveillance. It buys the industry speed and flexibility, and it bets that a centralised portal plus automated monitoring can flag a bad advertisement quickly enough that reporting within 24 hours protects investors as well as approval before publication once did. If the surveillance works, everyone wins. If it lags, the cost of a misleading ad shifts from the regulator's inbox to the investor's portfolio.
Nitin Konde
What Happens Next
The paper is a consultation, not a rule. Stakeholders can file comments until 14 July 2026. If SEBI proceeds, the code would be written into the SEBI (Intermediaries) Regulations, 2008, with a six-month transition before it binds.
For an industry that markets to retail India at the speed of social media, this is the most consequential rewrite of the advertising rulebook in years. The direction is clear: one code, fewer gates, more cameras.
FAQs
What is SEBI’s Common Advertisement Code (CAC)?
It is a proposed single rulebook that will govern all financial advertisements by SEBI-regulated entities in India.
What is the biggest change in the new proposal?
Prior approval for most ads is removed and replaced with mandatory reporting within 24 hours after publication.
Can celebrities still endorse financial products?
Yes, but only at the brand level with prior approval. Product-level endorsements remain restricted.
Who is now considered a “celebrity” under the new rules?
Influencers with 5 lakh+ followers, OTT actors, reality-TV personalities, and even AI-generated avatars.
