This proposal comes after the regulator observed the growing need to clearly distinguish content uploaded by Sebi-regulated persons from material posted by unregistered individuals on social media.
According to Sebi, such differentiation is essential to prevent investors from being misled.
Further, while publishing videos or any other content on social-media platforms (SMPs), regulated entities should ensure that their material does not include anything prohibited under law or anything that may harm investors’ interests, Sebi suggested in its consultation paper.
“All persons regulated by the Board and their agents (mutual fund distributors, distributors of portfolio management services, etc) shall prominently disclose their registered name and registration number on the home page of their social media channels as well as alongside each of the videos/content uploaded by them,” the regulator said.
This, Sebi said, will help viewers easily identify content uploaded by a regulated entity or its authorised agent.Sebi also proposed strict content standards and suggested that regulated entities and their agents should ensure that their posts do not contain any promise of guaranteed returns, statements prohibited under law, and content that is false, misleading, biased, or likely to misguide investors.In addition, they should avoid statements that take advantage of investors’ lack of knowledge or that exaggerate or misrepresent the risk-return profile of a product.
Also, they should be prohibited from referring to past performance unless explicitly permitted by Sebi. The use of the Sebi logo, references to Sebi offices or officials, or associations, direct or indirect, with any person offering investment advice or performance claims without Sebi’s approval should also be prohibited, the regulator suggested.
Further, Sebi clarified that if any part of the social media content, explicitly or implicitly, promotes a regulated entity or its products or services, such content should be treated as an advertisement.
Consequently, it should comply with the provisions of the advertisement code.
On Thursday, Sebi chairman Tuhin Kanta Pandey highlighted that the regulator has flagged more than 1 lakh instances of unlawful or misleading online content on social media and search platforms, including Meta, Google, Telegram and X, over the past 18 months.
In line with this, regulated entities are not permitted to associate with unregulated advisors on social media, helping prevent the spread of false claims and harmful influence, he had stated.
Earlier this month, Sebi announced that it has intensified engagement with major social media and internet platforms, urging them to strengthen safeguards against fraudulent investment-related content.
The regulator had pushed for a verification process ensuring only Sebi-registered entities can advertise investment products, and suggested the introduction of a distinct verified label for legitimate trading apps to help users steer clear of fake platforms
