SEBI Mandates Verification for Social Media Advertisements by Registered Intermediaries

The Securities and Exchange Board of India (SEBI) has introduced new guidelines requiring SEBI-registered intermediaries to verify their contact details before advertising on social media platforms. This measure aims to curb securities market fraud and enhance transparency.

Rising Online Frauds in the Securities Market

SEBI has observed a surge in fraudulent activities on various social media platforms, including YouTube, Facebook, Instagram, WhatsApp, X (formerly Twitter), Telegram, Google Play Store, and Apple Store. Perpetrators often mislead investors by offering deceptive testimonials, online trading courses, seminars, and guarantees of assured or risk-free returns.

With the increasing use of digital platforms, such fraudulent schemes have become widespread, endangering investors. SEBI’s latest directive seeks to counter these fraudulent practices and strengthen market integrity.

Verification Process for Advertisements

To enhance transparency and investor protection, SEBI has collaborated with social media platform providers (SMPPs) to regulate advertisements. According to SEBI’s directive, all registered intermediaries publishing ads on platforms such as Google and Meta must use the mobile number and email ID registered with SEBI’s SI Portal.

The release states, “These SMPPs will thereafter carry out advertiser verification of SEBI Registered Intermediaries after which, intermediaries will be permitted to upload/ publish advertisements on these platforms.”

Intermediaries interested in advertising on these platforms must ensure their contact details are updated on SEBI’s SI Portal by 30 April 2025.

Conclusion

SEBI’s latest mandate seeks to increase accountability and prevent fraudulent financial activities on digital platforms. By enforcing verification requirements, the regulator aims to safeguard investor interests and maintain trust in the securities market.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.