In a significant regulatory overhaul, the Securities and Exchange Board of India (SEBI) has notified the SEBI (Mutual Funds) (Amendment) Regulations, 2026 (Notification No. SEBI/LAD-NRO/GN/2026/324), aligning advertisement guidelines across financial market intermediaries under a unified framework—the Common Advertisement Code (CAC) under Chapter IIID.
By omitting the standalone Fifth Schedule from the Mutual Fund regulations, SEBI has eliminated fragmented, sector-specific marketing rules. In its place, the new code establishes a standardized, equitable regime for Asset Management Companies (AMCs), Stockbrokers, Portfolio Managers, and Investment Advisers.
Here is an analysis of what has changed, why SEBI initiated this shift, and what it means for financial institutions, market intermediaries, and retail investors.
What Has Changed?
Prior to this amendment, SEBI’s regulatory framework for advertising was fragmented:
-
Mutual Funds operated under the specific requirements of the Fifth Schedule to Regulation 28.
-
Stockbrokers and Portfolio Managers operated under individual exchange-level or entity-specific codes, which strictly prohibited celebrity endorsements.
Under the newly notified Common Advertisement Code (CAC), SEBI has introduced three fundamental structural shifts:
[Old Regime] [New CAC Regime]
------------------------------------ ------------------------------------
• MF 5th Schedule + Exchange Rules -----> • Single Unified Chapter IIID Code
• Celebrity Ads: Banned for brokers -----> • Entity/Brand Level Allowed for All
• Mandatory Prior Ad Approvals -----> • Post-Issuance Reporting (24-Hour)
-
Uniform Application Across Intermediaries: All SEBI-regulated market participants now adhere to the same advertising code, removing regulatory arbitrage between asset management companies, brokerage firms, and portfolio managers.
-
Standardized Celebrity Endorsements: Regulated entities are permitted to engage celebrities for brand and entity-level promotions across the board.
-
Shift to Post-Issuance Reporting: Routine advertisements no longer require mandatory prior clearance; entities must submit them to designated supervisory bodies via post-issuance reporting within 24 hours. Celebrity ads remain the sole category requiring prior administrative approval.
Key Provisions of the Common Advertisement Code
| Area | Regulatory Provision under CAC |
| Scope of Endorsements | Permitted strictly at the Entity or Brand level (e.g., building brand awareness for a broker or AMC). |
| Product-Level Restrictions | Prohibited from pitching specific investment schemes, fund products, or return promises. |
| Expense Allocations | Endorsement fees cannot be charged to mutual fund scheme expenses (TER) or passed on to clients. |
| Approval Architecture | Celebrity ads require prior approval from designated supervisory bodies; routine ads shift to 24-hour post-issuance reporting. |
| Performance Claims | Product ratings and rankings must be verified through a Past Risk and Return Verification Agency (PaRRVA). |
Why Is SEBI Allowing Celebrities at the Brand Level?
SEBI’s consultation paper highlights two main objectives behind this policy evolution:
-
Expanding Market Inclusion: While retail participation in Indian capital markets has grown exponentially, a vast demographic remains unbanked in securities. Brand-level campaigns featuring recognizable public figures help demystify financial institutions and build institutional trust.
-
Parity Across Financial Sector Regulators: Regulators in adjacent financial spaces (such as insurance and banking) routinely permit brand-level celebrity marketing. The CAC establishes regulatory parity for capital market intermediaries.
Industry Impact & Implementation Timeline
-
6-Month Grace Period: The amendment comes into force on the 180th day from its publication in the Official Gazette. Entities have this window to adapt internal compliance, marketing workflows, and approval mechanics.
-
No Impact on Scheme TER: Because celebrity costs cannot be loaded onto mutual fund schemes, Asset Management Companies and stockbroking platforms must finance these campaigns entirely through corporate profits.
-
Enhanced Fraud & Dark Pattern Control: The code explicitly restricts misleading claim structures, “dark patterns,” and unauthorized third-party campaigns, providing uniform enforcement tools (such as summary proceedings and client-onboarding freezes) for non-compliance.
Summary
The consolidation of advertisement regulations under Chapter IIID marks a mature step toward standardizing financial marketing in India. By drawing a clear line between brand awareness (permitted with approval) and product pitching (strictly protected), SEBI balances market expansion with robust investor protection
FCA, CWM (AAFM-US), CBV, CIFRS, R-ID, B.COM (H), RV* (IBBI)
Managing Partner at Ankit Gulgulia & Associates, Chartered Accountants. The Firm was setup in 2011 and has offices in Delhi NCR. AGA provides professional services to a large number of Clients both in India and Internationally.
AGA is supported by a well experienced team which include Chartered Accountants, Management Graduates, Company Secretaries, Cost Accountants, Valuers etc.