SEBI Ad Code: Post-Filing Wins, Certification Bottleneck Looms

SEBI is proposing to scrap the requirement that every advertisement from a stock broker or mutual fund must be pre-approved by an exchange or the regulator itself. The proposed Common Advertisement Code, now open for public comment, would replace that with a post-filing system. Firms would run their ads first and file them later.

That change matters because digital ads go through dozens of iterations in a single campaign. Pre-approval on every version was never practical. The code also opens the door to celebrity endorsements at the brand level. A mutual fund house could use a film star in a corporate brand campaign. It cannot use the same star in an ad for a specific scheme. Real estate and gold loan companies already use celebrities freely. Keeping market products out of that game looked increasingly arbitrary. The regulator's own history with investor losses tied to celebrity endorsements, such as Sahara and PACL, explains the caution. The code lets the brand borrow the star power. It keeps the star's face off the product pitch.

SEBI also wants to define who counts as a celebrity. The draft says lead actors in mainstream media and national-level sportspersons. It also includes social media influencers with 500,000 or more followers. That is a specific list. It leaves room for argument about regional film actors and local influencers. Retired athletes who still draw crowds are another grey area. The regulator will have to handle those edge cases case by case, or the code will create a new set of compliance questions instead of solving the old ones.