SEBI’s new Common Advertisement Code – Implications for Regulated Entities

The Board of the Securities and Exchange Board of India (‘SEBI’), at its meeting held on 24 September 2026, approved a Common Advertisement Code (‘CAC’) for certain regulated entities, namely stock brokers, depository participants, investment advisers, research analysts, online   bond   platform   providers, portfolio managers, and   mutual funds/asset management companies. The CAC approved by SEBI’s Board is based on a consultation paper dated 23 June 2026 (‘June Consultation Paper’) issued by SEBI.  In the June Consultation Paper, SEBI had noted that ‘advertisement guidelines applicable to various SEBI regulated entities are governed through multiple regulatory frameworks such as multiple regulations governing different regulated entities and circulars issued by SEBI/Stock Exchanges. While the underlying regulatory objective across such frameworks remains substantially similar, namely ensuring that advertisements are fair, balanced, truthful, transparent and not misleading, the prescriptions, terminology, approval mechanisms, disclaimers and compliance expectations vary across such entities.’

Some of the key features of the CAC are as follows:

1.       Use of celebrities for brand-level/entity-level promotion has been permitted for regulated entities, subject to prior approval and safeguards.

2.       Obtaining mandatory prior approval has been done away with, except for advertisements containing celebrity endorsements. However, post-issuance reporting will be required within three (3) working days. The June Consultation Paper had proposed a deadline of 24 hours for reporting advertisements, but SEBI’s Board has settled on three working days.

3.       Ratings and rankings assigned by a Past Risk and Return Verification Agency (PaRRVA)[1] can be advertised.

4.       The CAC distinguishes routine, factual and investor-service communications from promotional content and gives an illustrative list of items that are not advertisements.  Thus, educational or investor awareness material, responses to specific client queries, festive or seasonal greetings, communications issued pursuant to regulatory requirement and mere announcement of name of a regulated entity as sponsor of an event, program or initiative without accompanying promotional claims/aspects, will not be tantamount to advertisements.

5.       The CAC will not repeal prohibitions on ‘no guaranteed or assured returns’, mandatory risk statements, no misleading past-performance presentation, and no dark patterns. 

In light of the CAC, we have briefly analysed the applicable regulations for advertising by AIFs, managers of AIFs, portfolio   managers,  mutual funds, asset management companies, investment advisers and research analysts.

Advertising by AIFs and managers of AIFs.

Alternative investment funds (‘AIF’) registered with SEBI and the investment managers of such funds are conspicuous by their absence in the list of entities covered by the CAC.

The CAC does not apply to AIFs, or to investment managers of AIFs, because AIFs cannot make a public invitation to subscribe to their units. Regulation 4(b) of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 (‘AIF Regulations’) requires an AIF’s constitutional document[2] to prohibit the AIF from making an invitation to the public to subscribe to its securities. Further, Regulation 11 of the AIF Regulations requires AIFs to raise funds by private placement through an information memorandum or placement memorandum. An AIF’s scheme cannot have more than 1,000 investors, not counting accredited investors[3]. Regulation 3.2.1 of SEBI’s AIF Master Circular imposes a duty on AIFs to ensure that all marketing documents of the fund/scheme, are distributed only on a private basis to proposed investors. Therefore, AIFs cannot place advertisements in newspapers or put up promotional materials on social media platforms. 

Advertising by Mutual funds / AMCs

Currently advertising by mutual funds and the asset managers of mutual funds is regulated by the Fifth Schedule to the SEBI (Mutual Funds) Regulations, 2026 (‘MF Regs’) and Chapter 14 of the Mutual Fund Master Circular dated March 20, 2026 (‘MF Chapter 14’).

Once the CAC is notified, it will replace the Fifth Schedule to the MF Regs and MF Chapter 14. However, AMFI will continue to be the supervisory body administering the CAC[4].

The MF Regs permit celebrity endorsement only at the industry level, for the purpose of increasing awareness of mutual funds as a financial product category.  Such celebrity endorsements cannot promote a scheme of a particular Mutual Fund or be used as a branding exercise of a specific mutual fund or AMC. Expenses towards such celebrity endorsements for increasing awareness of mutual funds shall be limited to the amounts that are aggregated by mutual funds at industry level. The June Consultation Paper also stated that celebrity costs must not be charged to any scheme.

The key difference between the CAC and the current regime for mutual funds is that, currently, a celebrity may appear only in an industry-level mutual-fund campaign, with SEBI’s prior approval. An individual AMC cannot put a celebrity on its own brand. The CAC permits a celebrity to promote the AMC’s or mutual fund’s brand or entity name, subject to prior approval and safeguards. Under the CAC, a celebrity still cannot endorse a specific scheme, plan, SIP, SIF or other product[5].

Under the MF Regs, general advertisements neither need prior SEBI approval nor have to be filed with SEBI post issuance. Under Regulation 30 of the SEBI (Mutual Funds) Regulations, 1996, advertisements by mutual funds had to be filed with SEBI within 7 days after issuance. This filing requirement was done away with when the MF Regs took effect on 1 April 2026. When the CAC takes effect, mutual funds will have to resume filing advertisements, possibly with AMFI, albeit within three working days of issuance.

Advertising by Portfolio   Managers

Currently, Annexure 2A (‘PMS 2A Code’) of the SEBI Master Circular for Portfolio Managers dated July 16, 2025 regulates advertisements by portfolio managers.  The Association of Portfolio Managers in India (‘APMI’) is the supervisory body for portfolio managers. Under the PMS 2A Code, a portfolio manager can issue an advertisement without prior SEBI or APMI clearance. The PMS 2A Code also does not prohibit endorsements by celebrities.

Once the CAC is notified, it will replace the PMS 2A Code. However, APMI will continue to be the supervisory body administering the CAC for portfolio managers[6]. Once the CAC takes effect, the key changes for portfolio managers will be as follows:

·         Portfolio Managers will have to report all advertisements within three working days of issuance.

·         Use ofa celebrity to promote the portfolio manager’s brand or entity name would require the prior approval of APMI and safeguards. A celebrity cannot endorse a specific investment approach, strategy, PRIM product or other service

Advertising by Investment Advisers

At present, Paragraph 10 of the SEBI Master Circular for Investment Advisers dated February 6, 2026, regulates advertisements by investment advisors (‘Paragraph 10 Advertisement Code’). The Paragraph 10 Advertisement Code encapsulates the advertisement code issued by SEBI for investment advisors vide its circular SEBI/HO/MIRSD/MIRSD-PoD-2/P/CIR/2023/51 dated April 05, 2023.  The Paragraph 10 Advertisement Code is administered by BSE Administration & Supervision Ltd. (‘BASL’), which is the nominated Investment Adviser Administration and Supervisory Body (‘IAASB’).

Pursuant to SEBI’s circular of 5 April 2023, BASL had issued notice no. 20230406-02 dated 6 April 2023 (‘BASL Guidelines’) setting out advertising guidelines for Investment Advisers.  

Once the CAC is notified, it will replace the Paragraph 10 Advertisement Code and the BASL Guidelines. However, BASL will continue to be the supervisory body administering the CAC[7]. The key differences between the CAC and the current regulations applicable to advertisements by investment advisers are as follows:

1.       Clause 5.17 of the BASL Guidelines prohibits celebrities in advertisements, including cartoons and memes. The CAC permits a celebrity to promote an investment adviser’s brand or entity name, subject to prior approval and safeguards. A celebrity still cannot endorse a specific product, research product, subscription package or service.  The BASL Guidelines have a list of persons who would be deemed to be a ‘celebrity’ for the purpose of the aforementioned Clause 5.17.  The BASL Guidelines state that the decision of BASL shall be final in determining if the person made a part of the Advertisement/material is a celebrity or not.

2.       Under the Paragraph 10 Advertisement Code, an investment adviser cannot issue any advertisement or promotional material without prior approval of the IAASB. Under the CAC, prior clearance from IAASB is not required, unless the advertisement uses a celebrity. The adviser can issue the advertisement and report it within three working days after release of the advertisement.

Advertising by Research Analysts

At present, Paragraph 11 of the SEBI Master Circular for Research Analysts dated 6 February 2026 regulates advertisements by research analysts (‘Paragraph 11 Advertisement Code’). The Paragraph 11 Advertisement Code encapsulates the advertisement code issued by SEBI for research analysts vide its circular SEBI/HO/MIRSD/MIRSD-PoD-2/P/CIR/2023/51 dated 5 April 2023. The Paragraph 11 Advertisement Code is administered by the Research Analyst Administration and Supervisory Body (RAASB). BSE Limited (‘BSEL’) is the recognized RAASB under the SEBI Master Circular for Research Analysts.

As mentioned above, the CAC distinguishes routine, factual and investor-service communications from promotional content and gives an illustrative list of items that are not advertisements. For research analysts, this distinction already existed on account of a clarification issued by SEBI on 24 October 2024[8], which said a research report and research recommendations are not advertisements unless they promote products or services offered by the Research Analyst.

Further, BSEL has not issued any guidelines for advertising by research analysts and there is no ban on the use of celebrities, as in the case of investment advisors.

Once the CAC is notified, it will replace the Paragraph 11 Advertisement Code. However, BSEL will continue to be the supervisory body administering the CAC[9]. The key difference between the CAC and the Paragraph 11 Advertisement Code is that under the Paragraph 11 Advertisement Code, a research analyst cannot issue any advertisement or promotional material without prior approval of the RAASB/BSEL. Under the CAC, prior clearance from RAASB is not required, unless the advertisement uses a celebrity. Once the CAC takes effect, a research analyst will be able to issue an advertisement and report it within three working days after release of such advertisement.

SEBI’s press release containing the key decisions taken at the meeting of its Board held on September 24, 2026, can be found here.

The June Consultation Paper can be found here.

[The authors are Partner and Associate, respectively, in Corporate and M&A practice at Lakshmikumaran & Sridharan Attorneys, Mumbai]

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[1] SEBI had operationalized PaRRVA vide its circular dated 29 April 2026 (https://www.sebi.gov.in/legal/circulars/apr-2026/operationalisation-of-past-risk-and-return-verification-agency-parrva-_101185.html)

[2] Its memorandum and articles of association if it is a company, or trust deed if it has been set up as a trust, or partnership deed if it has been set up as an LLP.

[3] Regulation 10(f) of the AIF Regulations

[4] Continuity of AMFI  as an administrator is only an inference from, but the minutes of the Board meeting held on 24 September 2026 do not expressly say AMFI will keep this role.

[5] This statement is based on the draft CAC provided in the June Consultation Paper. SEBI’s press release containing the key decisions taken at the meeting of its Board held on 24 September 2026 does not say this expressly.

[6] Continuity of APMI  as an administrator is only an inference from, but the minutes of the Board meeting held on 24 September 2026 do not expressly say APMI will keep this role.

[7] Continuity of BASL  as an administrator is only an inference from, but the minutes of the Board meeting held on 24 September 2026 do not expressly say BASL will keep this role.

[8] Clarification with respect to advertisement code for Research Analysts (RAs) dated 24 October 2024 vide SEBI/HO/MIRSD/MIRSD-PoD1/P/CIR/2024/146 was circulated by BSE in its capacity as RAASB: https://www.bseindia.com/markets/MarketInfo/DownloadAttach.aspx?id=20241028-34&attachedId=4d881de1-e87a-4f9f-a890-9e61f00dbd76

[9] Continuity of BSEL  as an administrator is only an inference from, but the minutes of the Board meeting held on 24 September 2026 do not expressly say BSEL will keep this role.