In a decisive move to combat fraudulent investment schemes, the Securities and Exchange Board of India (Sebi) has instructed all financial intermediaries to register with social media platform providers (SMPPs) like Google and Meta before publishing advertisements. This directive aims to ensure transparency and verify the authenticity of financial promotions.
Why This Move?
The initiative follows concerns over a significant rise in investment frauds on platforms such as YouTube, Facebook, Instagram, WhatsApp, X (formerly Twitter), and Telegram. Fraudsters often lure victims by offering misleading testimonials, promoting fake trading courses, and making false claims of guaranteed, risk-free returns.
Who Must Comply?
Sebi’s order applies to the following intermediaries:
- Mutual funds
- Investment advisers
- Stock brokers
- Research analysts
These intermediaries are required to register using their official email IDs and mobile numbers, as per their records on the Sebi intermediary portal.
Ad Verification Process
After registration, SMPPs will conduct an advertiser verification process to validate the intermediary’s credentials. Only verified intermediaries will be allowed to upload or publish advertisements on these platforms.
This step ensures that financial promotions are regulated, reducing the risks of misinformation and fraud.
Deadline for Compliance
Sebi has set a deadline of April 30, 2025, for all intermediaries to update their details on its database and complete the registration process.
Protecting Investors
This measure is expected to safeguard investors by ensuring that only genuine, verified financial intermediaries can promote their services online. Sebi continues to prioritize investor protection through proactive regulations and strict monitoring of market activities.
Financial intermediaries are advised to act swiftly to meet the compliance deadline and contribute to a more transparent and secure investment ecosystem.
