SEBI has issued a consultation paper seeking public comments on a draft circular mandating disclosure of registered name and registration number by all Regulated Entities (REs) on social media platforms (SMPs) to combat rising securities frauds.
Background and Rationale
Fraudsters and unregistered persons increasingly perpetrate securities market frauds via misleading social media content. The proposal aims to enhance monitoring, transparency, and investor protection by distinguishing content from SEBI-regulated entities (e.g., stock brokers, depository participants, investment advisers, mutual funds) from unregulated posts. It strengthens existing codes of conduct to ensure SMP content avoids prohibited, false, or misleading material.
Key Disclosure Requirements
Regulated entities and agents (e.g., mutual fund distributors) must:
Prominently display their registered name and registration number on SMP home pages and alongside every video/content post.
Ensure content complies with laws and does not harm investor interests.
Prohibited Content
Social media posts by regulated entities/agents cannot include:
False, misleading, biased, deceptive, or exaggerated statements.
Promises of assured/risk-free returns or exploitation of investor inexperience.
References to past performance (unless SEBI-permitted), SEBI logo/officers, or unapproved associations/links.
Additional Provisions
Promotional content counts as advertisements and must follow applicable SEBI ad codes. The circular takes immediate effect upon finalization, issued under SEBI Act Section 11(1). Public comments are invited via SEBI’s portal by November 2025.
Policy Relevance
This policy intervention effectively creates a “regulatory blue tick” for the Indian securities market. By removing anonymity and ambiguity from financial social media, SEBI is raising the barrier to entry for fraudsters and enhancing digital investor protection. It shifts the burden of authenticity verification from the unsuspecting investor to the regulated entity, ensuring that digital trust is anchored in regulatory compliance.
Follow the full news here: Consultation Paper on draft circular- Disclosure of registered name and registration number by SEBI regulated entities and their agents on Social Media Platforms
