SEBI introduces new guidelines for intermediaries advertising on social media platforms

In a bid to crack down on fraudulent activities proliferating across digital platforms, the Securities and Exchange Board of India (SEBI) has issued new guidelines requiring registered intermediaries to verify their identities before advertising on social media platforms like Google and Meta. The announcement was made on Friday, as SEBI attempts to enhance transparency and investor protection within the securities market.

The decision comes amid a sharp increase in scams carried out via platforms like YouTube, Facebook, Instagram, WhatsApp, X (formerly Twitter), Telegram, and the Google Play Store. According to SEBI, scammers have been exploiting these platforms to lure investors with promises of risk-free returns, deceptive testimonials, and bogus online trading courses.

The regulator stated, “It has been decided in consultation with Social Media Platform Providers that all SEBI registered intermediaries uploading/publishing advertisements on SMPPs like Google/Meta (to start with), shall be required to register on such social media platforms using their email IDs and mobile numbers registered on SEBI SI Portal.”

The new rules mandate that all registered intermediaries must sign up on social media platforms using the contact details such as email IDs and mobile numbers already registered with SEBI’s SI Portal. The social media platforms will conduct verification checks before permitting these entities to publish advertisements.

This initiative aims to ensure that only verified and legitimate intermediaries can engage in promotional activities online. SEBI has also set a deadline of April 30, 2025, for intermediaries to update their contact information on the SEBI SI Portal.

The move is part of SEBI’s broader efforts to protect investors and maintain a fair securities market. With digital platforms increasingly being used to reach investors, SEBI aims to curb deceptive marketing practices before they can cause widespread damage.

The regulatory body has been actively working to create a safer investment environment by monitoring digital platforms more closely. This effort is expected to make it considerably harder for unscrupulous operators to advertise fraudulent schemes through major platforms.