SEBI Proposal May Allow Celebrity-Led Mutual Fund Ads with Scheme Restrictions

SEBI Proposes Common Advertisement Code

SEBI has released a consultation paper proposing a Common Advertisement Code (CAC) that would apply across multiple regulated entities.

The proposed framework covers mutual funds, stock brokers, investment advisers, research analysts, portfolio managers, and other intermediaries regulated by SEBI. The objective is to replace multiple advertising guidelines with a single, standardised code that promotes consistency, transparency, and investor protection.

Celebrity Endorsements May Be Allowed for Brand Campaigns

One of the key proposals would allow regulated entities to use celebrities for corporate and brand-building advertisements.

For mutual fund companies, celebrities could appear in campaigns that promote the asset management company (AMC) or the mutual fund brand. Such advertisements would focus on corporate identity rather than promoting investment products.

The proposal represents a shift from the current framework, where celebrity-led advertising is subject to stricter regulatory oversight.

Individual Mutual Fund Schemes Remain Off-Limits

While SEBI has proposed relaxing rules for corporate branding, it has retained restrictions on promoting individual mutual fund schemes.

Celebrity endorsements would not be permitted for specific mutual fund schemes, regardless of the proposed changes. The distinction seeks to prevent investors from making investment decisions based on celebrity influence rather than product suitability and risk considerations.

This approach continues SEBI’s emphasis on responsible financial advertising.

SEBI Proposes Post-Publication Reporting

The consultation paper also recommends changes to the advertisement approval process.

Currently, advertisements involving celebrities generally require prior approval before publication. Under the proposed framework, regulated entities would no longer need pre-approval.

Instead, advertisements would need to be reported to the regulator within 24 hours of publication through a prescribed reporting mechanism.

The change is intended to streamline compliance while maintaining regulatory oversight.

Common Digital Reporting Portal Planned

SEBI has also proposed creating a unified digital reporting platform.

All regulated entities would report advertisements through a common online portal within the prescribed timelines. The regulator believes this could simplify compliance, improve monitoring, and create a standardised reporting process across the securities market.

The consultation paper also seeks to clearly define what constitutes an advertisement under the proposed framework.

Uniform Rules Across Market Intermediaries

The proposed Common Advertisement Code would replace the separate advertising guidelines currently applicable to different regulated entities.

A unified framework is expected to reduce regulatory complexity while ensuring that investor communication remains fair, transparent, and consistent across the financial services industry.

Industry Impact

If implemented, the proposal could provide mutual fund companies with greater flexibility in corporate branding while preserving safeguards around investment product promotion.

Brand campaigns featuring celebrities may help improve visibility and awareness of fund houses. At the same time, continuing restrictions on scheme-specific endorsements are intended to ensure that investment decisions remain based on product features, risk disclosures, and investor suitability.

Conclusion

SEBI’s proposed Common Advertisement Code introduces a balanced approach to financial advertising. While mutual fund companies may gain the ability to use celebrities for corporate branding, restrictions on endorsing individual schemes would remain in place. The proposal also seeks to simplify compliance through post-publication reporting and a unified digital reporting system, reflecting SEBI’s broader effort to modernise advertising regulations while maintaining investor protection.

Summary

The Securities and Exchange Board of India (SEBI) has proposed a new advertising framework that could reshape how mutual fund companies and other market intermediaries promote their brands. The proposal forms part of a consultation paper on a Common Advertisement Code (CAC), which aims to establish uniform advertising standards across regulated entities.

A key proposal would allow celebrities to feature in brand-building advertisements for mutual fund companies. However, SEBI has proposed retaining restrictions on celebrity endorsements for individual mutual fund schemes. The regulator has also suggested replacing the existing pre-approval mechanism with a post-publication reporting system and introducing a common digital reporting portal.