SEBI has introduced a new Common Advertisement Code, effective October 8, 2026, for all market intermediaries. The rules allow celebrity endorsements only for brand-level marketing, requiring firms to cover these costs internally rather than passing them to clients or mutual fund schemes. This framework aims to standardize compliance and enhance transparency for investors across the financial sector.
The Securities and Exchange Board of India (SEBI) has officially implemented a new Common Advertisement Code (CAC) as of October 8, 2026, creating a single set of marketing rules for all market intermediaries. This unified framework applies to a wide range of entities, including stock brokers, asset management companies (AMCs), depository participants, investment advisers, and research analysts. By consolidating various previous guidelines, the regulator aims to simplify the compliance process while strengthening investor protections.
One of the most significant changes involves the use of celebrity endorsements. Under the new code, intermediaries are permitted to engage celebrities for marketing purposes, but these campaigns must be restricted to brand-level or entity-level promotion. Celebrities are strictly prohibited from endorsing or making claims about specific financial products or services. Furthermore, SEBI has implemented a strict fiscal discipline rule: the expenses incurred for celebrity campaigns must be borne by the intermediary firm itself. These costs cannot be charged to clients, investors, or mutual fund schemes, ensuring that marketing activities do not indirectly inflate the expense ratios borne by retail investors.
The code also introduces a shift in the approval process to reduce the compliance burden for routine marketing. Previously, entities often faced mandatory prior approval requirements for various types of advertisements. The new framework replaces this with a post-issuance reporting requirement. Firms are now required to submit details of their advertisements within three working days of issuance. This move is designed to allow firms to operate with greater agility while maintaining regulatory oversight.
Transparency is a core focus of the new mandate. The code includes specific rules for the display of ratings and rankings in advertisements. Any performance data or rankings used by a firm must be derived from a verified Past Risk and Return Verification Agency, ensuring that investors are not misled by manipulated or unsupported performance claims. Additionally, the regulator has explicitly prohibited the use of deceptive "dark patterns" in digital advertising. These are user-interface designs that might trick investors into taking actions that are not in their best interest, such as signing up for services without clear disclosure.
For investors, these changes represent a move toward clearer communication and safer financial product marketing. By separating brand-level messaging from product solicitation, the code aims to help retail investors distinguish between corporate branding and specific investment advice. For market participants, the transition requires updating internal compliance workflows to align with the new reporting timelines and disclosure standards. The primary monitorable for investors and stakeholders in the coming months will be how firms adapt their digital marketing strategies and whether the prohibition on charging celebrity campaign costs effectively limits unnecessary expenses in mutual fund schemes.