SEBI wants regulated entity, agent to display name, registration number on social media

SEBI on Friday proposed that all regulatory bodies and their agents should display the registered name and registration number prominently on the home page of their social media platforms.

The proposal comes after the regulator observed a growing need to clearly distinguish content uploaded by SEBI-regulated individuals from content posted by unregistered individuals on social media.

According to SEBI, such a distinction is necessary to prevent investors from being misled.

Further, while publishing videos or any other content on social-media platforms (SMPs), regulatory bodies should ensure that their content does not contain anything prohibited under law or prejudicial to investors’ interests, SEBI suggested in its consultation paper.

“All persons regulated by the Board and their agents (mutual fund distributors, distributors of portfolio management services, etc.) shall clearly disclose their registered name and registration number on the home page of their social media channels as well as with every video/content uploaded by them,” the regulator said.

This will help viewers easily identify content uploaded by a regulated entity or its authorized agent, Sebi said.

SEBI also proposed stricter content norms and suggested that regulated entities and their agents should ensure that their posts do not contain any promise of guaranteed returns, statements prohibited under law and material that is false, misleading, biased or misleading to investors.

In addition, they should avoid statements that take advantage of investors’ lack of knowledge or that exaggerate or misrepresent the product’s risk-reward profile.

Also, they should be prohibited from referring to past performance unless expressly permitted by SEBI. Use of SEBI’s logo, references to SEBI’s offices or officers or associations, directly or indirectly, along with any person offering investment advice or performance claims without SEBI’s approval should also be prohibited, the regulator suggested.

Further, SEBI clarified that if any piece of social media content, explicitly or implicitly, promotes a regulated entity or its products or services, such content should be treated as advertisement.

Consequently, it must comply with the provisions of the Advertising Code.

On Thursday, Sebi Chairman Tuhin Kanta Pandey highlighted that the regulator has flagged over 1 lakh cases of illegal or misleading online content on social media and search platforms including Meta, Google, Telegram and X in the last 18 months.

Pursuant to this, regulatory bodies are not permitted to associate with unregulated advisers on social media, which helps prevent the spread of false claims and harmful influence, he said.

Earlier this month, Sebi announced that it has intensified engagement with major social media and internet platforms, urging them to strengthen safeguards against fraudulent investment-related content.

The regulator had pushed for a verification process that ensures only SEBI-registered entities can advertise investment products, and suggested introducing a separate verified label for legitimate trading apps to help users stay away from fake platforms.