SEBI Code on Advertisements

April 14, 2023

What is SEBI’s Code on Advertisement?

Code of rules and guidelines for investment advisers (IAs) and research analysts (RAs) who offer financial advice or research reports. SEBI aims to protect investors' interests and prevent misleading or fraudulent communication.

Who are IAs and RAs?

IAs provide financial advice to clients based on their resources and have a fiduciary duty to act in the clients' best interests. RAs create research reports on securities, stocks, and other assets to help investors make informed decisions.

Forms of Communication Covered by the Code

1. Pamphlets 2. Brochures 3. Circulars 4. Notices 5. Research Reports 6. Newspaper or Television Ads 7. Mail 8. Electronic Messaging Contd...

Any written or verbal statement made by IAs or RAs to influence investors to make investments.

Forms of Communication Covered by the Code

Contd... 9. Social Media Platforms 10. Signboards /Hoardings 11. Radio 12. Internet 13. Tape Recording 14. Videotape Recordings 15. Pictures, or 16. Any other manner whatsoever


IAs and RAs must provide the following information and disclosures: 1. Name and registration number with SEBI 2. Non-guarantee disclaimer of future returns or performance 3. Conflicts of interest or benefits disclosure contd..


contd.. 4. Disciplinary action disclosure by SEBI or other authority 5. Risk factors disclosure related to advice/report 6. Limitations or assumptions disclosure in analysis/methodology 7. Sources of data/information disclosure in advice/report

Prohibitions in the Advertisement

The Code prohibits IAs and RAs from using: 1. Misleading statements or unrealistic expectations 2. Superlative terms (e.g., "best," "highest," "guaranteed") 3. Complex language that may confuse investors contd..

Prohibitions in the Advertisement

contd.. 4. Unjustified comparisons of services/products 5. Implying SEBI or other authority endorsement 6. Soliciting business through unsolicited calls/messages 7. Undisclosed terms in free trials/discounts 8. Unverified testimonials/endorsements.

Other Compliances

1. Keep ad records for at least 5 years. 2. Adhere to regulatory obligations and code of conduct in advertisements. 3. Avoid violating laws or regulations in advertisements. 4. Do not harm SEBI or securities market reputation/integrity.

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